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QUESTAR GAS COMPANY
(a Utah corporation)
Medium-Term Notes, Series D
Due From Nine Months to 30 Years From Date of Issue
DISTRIBUTION AGREEMENT
___________ ___, 2001
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Table of Contents
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Page
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SECTION 1. Appointment as Agent ............................................... 2
SECTION 2. Representations and Warranties ..................................... 4
SECTION 3. Solicitations as Agent; Purchases as Principal ..................... 8
SECTION 4. Covenants of the Company ........................................... 9
SECTION 5. Conditions of Agents' Obligations .................................. 13
SECTION 6. Delivery of and Payment for Notes Sold through the Agents .......... 19
SECTION 7. Additional Covenants of the Company ................................ 19
SECTION 8. Indemnification .................................................... 21
SECTION 9. Contribution ....................................................... 23
SECTION 10. Payment of Expenses ............................................... 25
SECTION 11. Representations, Warranties and Agreements to Survive Delivery .... 26
SECTION 12. Termination ....................................................... 26
SECTION 13. Notices ........................................................... 27
SECTION 14. Governing Law and Time ............................................ 28
SECTION 15. Parties ........................................................... 28
SECTION 16. Captions .......................................................... 28
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QUESTAR GAS COMPANY
Medium-Term Notes, Series D, Due
From Nine Months to 30 Years from Date of Issue
DISTRIBUTION AGREEMENT
________ __, 2001
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
4 World Financial Center, 15th Floor
New York, New York 10080
BANC ONE CAPITAL MARKETS, INC.
One Bank One Plaza
Chicago, Illinois 60670
U.S. BANCORP PIPER JAFFRAY INC.
U.S. Bancorp Tower
111 S.W. Fifth Avenue, Suite 1900
Portland, Oregon 97204
Ladies and Gentlemen:
Questar Gas Company, a Utah corporation (the "Company"), confirms its
agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch"), Banc One Capital Markets, Inc. and U.S. Bancorp
Piper Jaffray Inc. (each, an "Agent", and together, the "Agents") with respect
to the issue and sale by the Company of its Medium-Term Notes, Series D, due
from nine months to 30 years from date of issue, described herein (the "Notes").
The Notes are to be issued pursuant to an indenture dated as of May 1, 1992, as
amended, supplemented or modified from time to time (the "Indenture"), between
the Company and Wells Fargo Bank Northwest, National Association (f/k/a First
Security Bank, N.A.) and as successor trustee to Citibank, N.A., as trustee (the
"Trustee").
As of the date hereof, the Company has authorized the issuance and sale of
up to $100,000,000 aggregate principal amount of Notes directly or through the
Agents pursuant to the terms of this Agreement. It is understood, however, that
the Company may from time to time authorize the issuance of additional Notes and
that such additional Notes may be distributed by the Company or through or to
the Agents pursuant to the terms of this Agreement, all as though the issuance
of such Notes were authorized as of the date hereof.
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This Agreement provides both for the sale of Notes by the Company directly
to purchasers, in which case the Agents will act as agents of the Company in
soliciting Note purchases, and (as may from time to time be agreed to by the
Company and the related Agent or the Agents) to one or more Agents as principal
for resale to purchasers.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-______________) for
the registration of the Notes under the Securities Act of 1933, as amended (the
"1933 Act"), and the offering thereof from time to time in accordance with Rule
415 of the rules and regulations of the Commission under the 1933 Act (the "1933
Act Regulations"). Such registration statement has been declared effective by
the Commission and the Indenture has been qualified under the Trust Indenture
Act of 1939, as amended (the "1939 Act"). Such registration statement (and any
further registration statements which may be filed by the Company for the
purpose of registering additional Notes and in connection with which this
Agreement is included or incorporated by reference as an exhibit) and the
prospectus constituting a part thereof, and any prospectus supplements relating
to the Notes, including all documents incorporated therein by reference, as from
time to time amended or supplemented by the filing of documents pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"), or the 1933 Act or
otherwise, are referred to herein as the "Registration Statement" and the
"Prospectus", respectively, except that if any revised prospectus shall be
provided to the Agents by the Company for use in connection with the offering of
the Notes whether or not such revised prospectus is required to be filed by the
Company pursuant to Rule 424(b) of the 1933 Act Regulations, the term
"Prospectus" shall refer to such revised prospectus from and after the time it
is first provided to the Agents for such use.
SECTION 1. APPOINTMENT AS AGENT.
(a) APPOINTMENT OF AGENTS. Subject to the terms and conditions stated
herein and subject to the reservation by the Company of the right to sell Notes
directly on its own behalf, the Company hereby appoints the Agents, except as
otherwise provided in this Section 1(a), as the exclusive agents for the purpose
of soliciting purchases of the Notes from the Company by others and agrees that,
except as otherwise contemplated herein, whenever the Company determines to sell
Notes directly to one or more of the Agents as principal for resale to others,
it will enter into a Terms Agreement (as hereafter defined) relating to such
sale in accordance with the provisions of Section 3(b) hereof if requested by
such Agent. The Company agrees that, except as otherwise provided in this
Section 1(a), during the period the Agents are acting as the Company's agents
hereunder, the Company will not engage any other party to assist in the
placement of the Notes (other than any person or entity which, by executing a
counterpart of this Agreement, becomes an Agent hereunder). Notwithstanding the
foregoing, the Company reserves the right to (i) appoint additional agents for
the purpose of placing Notes in one or more discrete transactions during the
term of this Agreement under the terms of an agreement substantially identical
to this Agreement (provided that the commission to be paid to such additional
agents in connection with the sale of any Note shall be the applicable
commission determined pursuant to Section 3(a) hereof), and (ii) sell Notes to
one or more underwriters in one or more underwritten transactions so long as
such underwriter or underwriters shall execute an agreement substantially
identical to this Agreement relating to such underwritten transaction or
transactions, provided that in each such case no such agreement will appoint any
such agent or underwriter as an agent under this Agreement except as relates to
the related transaction or
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transactions. The Company shall give prompt written notice to the Agents of the
occurrence of any event described in clause (i) or (ii) above. As used herein,
the term "Agent", in addition to Merrill Lynch, Banc One Capital Markets, Inc.
and U.S. Bancorp Piper Jaffray Inc. refers to each person or entity which, at
any particular time, is an agent or underwriter, as the case may be, for the
Company hereunder as evidenced by its execution of a counterpart of this
Agreement.
(b) REASONABLE EFFORTS SOLICITATIONS; RIGHT TO REJECT OFFERS. Upon receipt
of instructions from the Company, the Agents will use their reasonable efforts
to solicit offers to purchase such principal amount of the Notes as the Company
and the Agents shall agree upon from time to time during the term of this
Agreement, it being understood that the Company shall not approve the
solicitation of offers to purchase Notes in excess of the amount which shall be
authorized by the Company from time to time or in excess of the principal amount
of Notes registered pursuant to the Registration Statement. The Agents will have
no responsibility for maintaining records with respect to the aggregate
principal amount of Notes sold, or of otherwise monitoring the availability of
Notes for sale under the Registration Statement. Each Agent will communicate to
the Company, orally or in writing, each reasonable offer to purchase Notes,
other than those offers rejected by such Agent. Each Agent shall have the right,
in its discretion reasonably exercised, to reject any proposed purchase of
Notes, as a whole or in part, and any such rejection shall not be deemed a
breach of the Agent's agreement contained herein. The Company shall have the
sole right to accept or reject any proposed purchase of the Notes, in whole or
in part, and any such rejection shall not be deemed a breach of the Company's
agreement contained herein.
(c) SOLICITATIONS AS AGENT; PURCHASES AS PRINCIPAL. In soliciting offers
to purchase the Notes on behalf of the Company and in performing its other
obligations hereunder (other than with respect to any purchase by the Agents as
principal, pursuant to a Terms Agreement or otherwise), each Agent shall act
solely as agent for the Company and not as principal. Each Agent shall make
reasonable efforts to assist the Company in obtaining performance by each
purchaser whose offer to purchase Notes has been solicited by such Agent and
accepted by the Company. No Agent shall have any liability to the Company in the
event any such purchase is not consummated for any reason. If the Company shall
default on its obligation to deliver Notes to a purchaser whose offer it has
accepted, the Company shall (i) hold the Agent harmless against any loss, claim
or damage arising from or as a result of such default by the Company and (ii)
notwithstanding such default, pay to the Agent any commission to which it would
be entitled in connection with such sale. No Agent shall have any obligation to
purchase Notes from the Company as principal, but an Agent may agree from time
to time to purchase Notes as principal. Any such purchase of Notes by an Agent
as principal shall be made in accordance with Section 3(b) hereof if requested
by such Agent.
(d) RELIANCE. The Company and the Agents agree that any Notes the
placement of which the Agents arrange shall be placed by the Agents, and any
Notes purchased by the Agents shall be purchased, in reliance on the
representations, warranties, covenants and agreements of the Company contained
herein and on the terms and conditions and in the manner provided herein.
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SECTION 2. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company represents
and warrants to each Agent as of the date hereof, as of the date of each
acceptance by the Company of an offer for the purchase of Notes (whether through
an Agent as agent or from an Agent as principal), as of the date of each
delivery of Notes (whether through an Agent as agent or to an Agent as
principal) (the date of each such delivery to an Agent as principal being
hereafter referred to as a "Settlement Date"), and as of any time that the
Registration Statement or the Prospectus shall be amended or supplemented or
there is filed with the Commission any document incorporated by reference into
the Prospectus (each of the times referenced above being referred to herein as a
"Representation Date") as follows:
(i) REGISTRATION STATEMENT AND PROSPECTUS. At the time the
Registration Statement became effective, the Registration Statement
complied, and as of each Representation Date will comply, in all material
respects with the requirements of the 1933 Act, the 1933 Act Regulations,
the 1939 Act and the rules and regulations of the Commission promulgated
under the 1939 Act. The Registration Statement, at the time it became
effective, did not, and at each time thereafter at which any amendment to
the Registration Statement becomes effective or any Annual Report on Form
10-K is filed by the Company with the Commission and as of each
Representation Date, will not, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The Prospectus, as
of the date hereof does not, and as of each Representation Date will not,
contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that the representations and warranties in this subsection shall
not apply to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by or on behalf of the Agents expressly
for use in the Registration Statement or Prospectus.
The prospectus and any pricing supplement filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Agents for use
in connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(ii) INCORPORATED DOCUMENTS. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the
Prospectus, when they became effective or at the times they were or
hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1934 Act and the rules and
regulations promulgated thereunder (the "1934 Act Regulations"), and, when
read together with the other information in the Prospectus, at the times
the Registration Statement became effective and at the time the Prospectus
was issued did not and will not contain an untrue statement of a material
fact or omit to state a material
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fact required to be stated therein or necessary to make the statements
therein, not misleading.
(iii) ACCOUNTANTS. The accountants who certified the financial
statements and supporting schedules included or incorporated by reference
in the Prospectus are, to the best knowledge of the Company, independent
public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(iv) FINANCIAL STATEMENTS. The financial statements included in the
Registration Statement and the Prospectus present fairly the financial
position of the Company and its consolidated subsidiaries as at the dates
indicated and the results of their operations for the periods specified;
except as otherwise stated in the Registration Statement, such financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis; and the supporting
schedules included in the Registration Statement present fairly the
information required to be stated therein. The selected financial data and
the summary financial information included in the Prospectus present fairly
the information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in the Registration
Statement.
(v) MATERIAL CHANGES OR MATERIAL TRANSACTIONS. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein, (a) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, (b) there have been no transactions entered
into by the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the Company
and its subsidiaries considered as one enterprise, and (c) except for the
regular dividends, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(vi) DUE INCORPORATION AND QUALIFICATION. The Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Utah with corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure to so qualify or be in good standing would not have a
material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise (a "Material Adverse Effect").
(vii) SUBSIDIARIES. Each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its
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properties and to conduct its business as described in the Prospectus and
is duly qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership of property or the conduct of business,
except where the failure to so qualify or be in good standing would not
have a Material Adverse Effect; and all of the issued and outstanding
capital stock of each subsidiary has been duly authorized and validly
issued, is fully paid and nonassessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(viii) CAPITAL STOCK. The shares of issued and outstanding common
stock of the Company have been duly authorized and validly issued and are
fully paid and nonassessable.
(ix) AUTHORIZATION OF AGREEMENT. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) AUTHORIZATION AND VALIDITY OF THE INDENTURE AND THE NOTES. The
Notes have been duly authorized for issuance and sale pursuant to this
Agreement and, when issued and delivered pursuant to this Agreement against
payment of the consideration therefor specified in the Prospectus or
pursuant to any Terms Agreement, the Notes will have been duly executed by
the Company and, when authenticated, issued and delivered in the manner
provided for in the Indenture and delivered against payment of the purchase
price therefor as provided in this Agreement, will constitute valid and
legally binding obligations of the Company enforceable against the Company
in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and general
equitable principles, and will be entitled to the benefits provided by the
Indenture, which will be substantially in the form filed as an exhibit to
the Registration Statement; the Indenture has been duly authorized by the
Company and the Indenture has been duly qualified under the 1939 Act and
constitutes a valid and legally binding instrument of the Company,
enforceable against the Company in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and general equitable principles; and the Notes and the Indenture
conform to the respective descriptions thereof in the Prospectus.
(xi) NO DEFAULTS; REGULATORY APPROVALS. Neither the Company nor any of
its subsidiaries is in violation of its charter or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, which violations or defaults in the aggregate
would have a Material Adverse Effect; and the execution and delivery of
this Agreement and the consummation of the transactions contemplated herein
and therein and pursuant to any applicable Terms Agreement have been duly
authorized by all necessary corporate action and will not conflict with or
constitute a breach of, or a default under, or result in the creation or
imposition of any
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lien, charge or encumbrance upon any property or assets of the Company or
any of its subsidiaries, except as expressly contemplated in the Indenture
or except as would not have a Material Adverse Effect, pursuant to any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property or
assets of the Company or any of its subsidiaries is subject, nor will such
action result in any violation of the provisions of the charter or by-laws
of the Company or, except as would not have a Material Adverse Effect, any
applicable law, administrative regulation or administrative or court
decree.
(xii) LEGAL PROCEEDINGS; CONTRACTS. There is no action, suit or
proceeding before or brought by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
threatened against, the Company or any of its subsidiaries, which is
required to be disclosed in the Registration Statement (other than as
disclosed therein) or which would reasonably be expected to result in a
Material Adverse Effect, all pending legal or governmental proceedings to
which the Company or any of its subsidiaries is a party or which any of
their respective property is subject which are not described in the
Registration Statement, including ordinary routine litigation incidental to
the business, considered in the aggregate, would not reasonably be expected
to cause a Material Adverse Effect; and there are no contracts or documents
of the Company or any of its subsidiaries which are required to be filed as
exhibits to the Registration Statement by the 1933 Act or by the 1933 Act
Regulations which have not been so filed.
(xiii) NO GOVERNMENTAL AUTHORIZATION. No authorization, approval or
consent of any court or governmental authority or agency is necessary in
connection with the sale of the Notes hereunder, except such as may be
required under the 1933 Act, the 1933 Act Regulations and state securities
laws and except as have been obtained.
(xiv) POSSESSION OF PERMITS. The Company and its subsidiaries possess
such valid franchises, certificates of convenience and necessity,
easements, rights-of-way, operating rights, licenses, permits, consents,
authorizations and orders of governmental political subdivisions or
regulatory authorities as are necessary to conduct the business now
operated by them, except those the failure of which to possess would not
have a Material Adverse Effect, and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification thereof which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding would have a
Material Adverse Effect.
(xv) INVESTMENT COMPANY ACT. Neither the Company nor any of its
subsidiaries is regulated or required to be registered as an "investment
company" under the Investment Company Act of 1940, as amended (the "1940
Act").
(xvi) RATINGS. The Medium-Term Note Program under which the Notes are
issued (the "Program"), as well as the Notes, are rated A1 by Moody's
Investors Service, Inc. and A+ by Standard & Poor's Ratings Services, or
such other rating as to which the Company shall have most recently notified
the Agents pursuant to Section 4(a) hereof.
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(b) ADDITIONAL CERTIFICATIONS. Any certificate signed by any director or
officer of the Company and delivered to the Agents or to counsel for the Agents
in connection with an offering of Notes or the sale of Notes to one or more
Agents as principal shall be deemed a representation and warranty by the Company
to the Agents as to the matters covered thereby on the date of such certificate
and at each Representation Date subsequent thereto.
SECTION 3. SOLICITATIONS AS AGENT; PURCHASES AS PRINCIPAL.
(a) SOLICITATIONS AS AGENT. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, each Agent agrees, when acting as an agent of the Company, to use its
reasonable efforts to solicit offers to purchase the Notes upon the terms and
conditions set forth herein and in the Prospectus. In connection with the
solicitation of offers to purchase Notes, the Agents are not authorized to
provide any written information relating to the Company to any prospective
purchaser other than the Prospectus and documents incorporated by reference in
the Prospectus.
The Company reserves the right, in its sole discretion, to suspend
solicitation of offers to purchase the Notes through the Agents, as agents,
commencing at any time for any period of time or permanently. Upon receipt of
instructions from the Company, the Agents will forthwith suspend solicitation of
offers to purchase from the Company until such time as the Company has advised
the Agents that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
Note sold by the Company as a result of a solicitation made by such Agent as set
forth in Schedule A hereto; PROVIDED, HOWEVER, that the Company shall only be
obligated to pay one such fee with respect to any particular Note so sold.
The purchase price, interest rate, maturity date and other terms of the
Notes shall be agreed upon by the Company and the Agents and set forth in a
pricing supplement to the Prospectus to be prepared following each acceptance by
the Company of an offer for the purchase of Notes. Except as may be otherwise
provided in such supplement to the Prospectus, the Notes will be issued in
denominations of $1,000 or any larger amount that is an integral multiple of
$1,000. All Notes sold through the Agents as agents will be sold at 100% of
their principal amount unless otherwise agreed to by the Company and the Agents.
Each Agent acknowledges and agrees that any funds which such Agent receives in
respect of a purchase of Notes, which purchase has been solicited by such Agent,
as agent of the Company, will be received, held and disposed of by such Agent,
as agent of the Company.
(b) PURCHASES AS PRINCIPAL. Each sale of Notes to one or more Agents as
principal shall be made in accordance with the terms contained herein and, if
requested by such Agent, pursuant to a separate agreement which will provide for
the sale of such Notes to, and the purchase and reoffering thereof by, such
Agent or Agents. Each such separate agreement (which may be an oral agreement)
between one or more Agents and the Company is herein referred to as a "Terms
Agreement". Unless the context otherwise requires, each reference contained
herein to "this Agreement" shall be deemed to include any Terms Agreement
between the Company and one or more Agents. Each such Terms Agreement, whether
oral or in writing, shall be with
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respect to such information (as applicable) as is specified in Exhibit A hereto.
An Agent's commitment to purchase Notes as principal pursuant to any Terms
Agreement or otherwise shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Each Terms Agreement shall
specify the principal amount of Notes to be purchased by each Agent pursuant
thereto, the price to be paid to the Company for such Notes (which, if not so
specified in a Terms Agreement, shall be at a discount equivalent to the
applicable commission set forth in Schedule A hereto), the time and place of
delivery of and payment for such Notes, any provisions relating to rights of,
and default by purchasers acting together with the Agents in the reoffering of
the Notes, and such other provisions (including further terms of the Notes) as
may be mutually agreed upon. The Agents may utilize a selling or dealer group in
connection with the resale of the Notes purchased by the Agents. Such Terms
Agreement shall also specify whether or not any officer's certificate, opinions
of counsel or comfort letter specified in Sections 7(b), 7(c) and 7(d) hereof
shall be required to be delivered by the Company on the related Settlement Date.
(c) ADMINISTRATIVE PROCEDURES. Administrative procedures with respect to
the sale of Notes shall be agreed upon from time to time by the Agents and the
Company (the "Procedures"). The initial Procedures, which are set forth in
Exhibit B hereto, shall remain in effect until changed by agreement between the
Company and the Agents or, with respect to the sale of the Notes to one or more
Agents as principal, unless modified by the applicable Terms Agreement. The
Agents and the Company agree to perform the respective duties and obligations
specifically provided to be performed by them in the Procedures.
(d) DELIVERY OF CLOSING DOCUMENTS. The documents required to be delivered
by Section 5 hereof shall be delivered at the office of Skadden, Arps, Slate,
Meagher & Flom LLP, Four Times Square, New York, New York 10036 on the date
hereof, or at such other time or place as the Agents and the Company may agree.
SECTION 4. COVENANTS OF THE COMPANY.
The Company covenants with each Agent as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS. The
Company, subject to Section 4(b), will comply with the requirements of Rule 434,
and will notify the Agents immediately, and confirm the notice in writing, (i)
when any post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectus or any document to be filed
pursuant to the 1934 Act which will be incorporated by reference into the
Prospectus shall have been filed, (ii) of the receipt of any comments from the
Commission concerning the Registration Statement, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of the qualification of the Notes
for offering or sale in any jurisdiction, or of the initiation or threatening of
any proceedings for any of such purposes and (v) any change in the rating
assigned by any nationally recognized statistical rating organization to the
Program or any debt securities (including the Notes) of the Company or the
public announcement by any nationally recognized statistical rating organization
that it has under surveillance or review, with possible
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negative implications, its rating of the Program or any such debt securities, or
the withdrawal by any nationally recognized statistical rating organization of
its rating of the Program or any such debt securities. The Company will promptly
effect the filings necessary pursuant to Rule 424(b) and will take such steps as
it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) FILING OF AMENDMENTS. The Company will give the Agents notice of its
intention to file or prepare any additional registration statement with respect
to the registration of additional Notes, any amendment to the Registration
Statement or any amendment or supplement to the Prospectus (other than an
amendment or supplement providing solely for a change in the interest rates,
maturity or price of Notes or relating solely to an offering of debt securities
other than the Notes), whether by the filing of documents pursuant to the 1934
Act, the 1933 Act or otherwise, and (including any filing under Rule 462(b)),
any Term Sheet or any amendment, supplement or revision to either the prospectus
included in the Registration Statement at the times it became effective or to
the Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise,
will furnish the Agents with copies of any such documents a reasonable amount of
time prior to such proposed filing or use, as the case may be, and will not file
or use any such document to which the Agents or counsel for the Agents shall
reasonably object. Such consent does not constitute a waiver of any of the
conditions set out in Section 5.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished or will
deliver to the Agents and counsel for the Agents, without charge, signed copies
of the Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference therein) and
signed copies of all consents and certificates of experts, and will also deliver
to the Agents, without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for each of
the Agents. The copies of the Registration Statement and each amendment thereto
furnished to the Agents will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(d) DELIVERY OF PROSPECTUSES. The Company will furnish to each Agent,
without charge, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus (as amended or supplemented) as such Agent may reasonably request.
The Prospectus and any amendments or supplements thereto furnished to the Agents
will be identical to the electronically transmitted copies thereof filed with
the Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.
(e) PREPARATION OF PRICING SUPPLEMENTS. The Company will prepare, with
respect to any Notes to be sold through or to the Agents pursuant to this
Agreement, a Pricing Supplement with respect to such Notes in a form previously
approved by the Agents and will file such Pricing Supplement pursuant to Rule
424(b)(3) under the 1933 Act not later than the close of business of the
Commission on the fifth business day after the date on which such Pricing
Supplement is first used.
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(f) REVISIONS OF PROSPECTUS -- MATERIAL CHANGES. Except as otherwise
provided in subsection (l) of this Section, if at any time during the term of
this Agreement any event shall occur or condition exist as a result of which it
is necessary, in the reasonable opinion of counsel for the Agents or counsel for
the Company, to further amend or supplement the Prospectus in order that the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time the Prospectus
is delivered to a purchaser, or if it shall be necessary, in the reasonable
opinion of either such counsel, to amend or supplement the Registration
Statement or the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, immediate notice shall be given, and confirmed
in writing, to the Agents to cease the solicitation of offers to purchase the
Notes in the Agents' capacity as agents and to cease sales of any Notes the
Agents may then own as principal pursuant to a Terms Agreement, and the Company
will promptly prepare and file with the Commission such amendment or supplement,
whether by filing documents pursuant to the 1934 Act, the 1933 Act or otherwise,
as may be necessary to correct such untrue statement or omission or to make the
Registration Statement and Prospectus comply with such requirements purchasing
prior to the date on which such financial information is released to the general
public.
(g) PROSPECTUS REVISIONS -- PERIODIC FINANCIAL INFORMATION. Except as
otherwise provided in subsection (1) of this Section, on or prior to the date on
which there shall be released to the general public interim financial statement
information related to the Company with respect to each of the first three
quarters of any fiscal year or preliminary financial statement information with
respect to any fiscal year, the Company shall furnish such information to the
Agents, confirmed in writing, and shall, prior to the delivery of the Prospectus
to any purchaser of the Notes purchasing after the date on which such financial
information is released to the general public, by the filing of documents
pursuant to the 1934 Act in the ordinary course, the 1933 Act or otherwise cause
the Prospectus to be amended or supplemented to include or incorporate by
reference financial information with respect thereto and corresponding
information for the comparable period of the preceding fiscal year included in
such release (but not any narrative information included in each such release),
as well as such other information and explanations as shall be necessary for an
understanding thereof or as shall be required by the 1933 Act or the 1933 Act
Regulations.
(h) PROSPECTUS REVISIONS -- AUDITED FINANCIAL INFORMATION. Except as
otherwise provided in subsection (1) of this Section, on or prior to the date on
which there shall be released to the general public financial information
included in or derived from the audited financial statements of the Company for
the preceding fiscal year, the Company shall furnish such information to the
Agents, confirmed in writing, and shall, prior to the delivery of the Prospectus
to any purchaser of the Notes purchasing after the date on which such financial
information is released to the general public, cause the Registration Statement
and the Prospectus to be amended, by the filing of documents pursuant to the
1934 Act in the ordinary course, the 1933 Act or otherwise, to include or
incorporate by reference such audited financial statements and the report or
reports, and consent or consents to such inclusion or incorporation by
reference, of the independent accountants with respect thereto, as well as such
other information and explanations as shall be necessary for an understanding of
such financial statements or as shall be required by the 1933 Act or the 1933
Act Regulations.
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(i) EARNINGS STATEMENTS. The Company, by applying the provisions of Rule
158 under the 1933 Act, will make generally available to its security holders as
soon as practicable, but not later than 90 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 under the 1933 Act) covering each twelve month period beginning, in
each case, not later than the first day of the Company's fiscal quarter next
following the "effective date" (as defined in such Rule 158) of the Registration
Statement. Nothing in this Section 4(h) shall require the Company to make such
earnings statement available more frequently than once in any period of twelve
months.
(j) BLUE SKY QUALIFICATIONS. The Company will endeavor, in cooperation
with the Agents, to qualify the Notes for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United States as
the Agents may designate, and will maintain such qualifications in effect for as
long as may be required for the distribution of the Notes; PROVIDED, HOWEVER,
that the Company shall not be obligated to file any general consent to service
of process or to qualify as a foreign corporation in any jurisdiction in which
it is not so qualified. The Company will file such statements and reports as may
be required by the laws of each jurisdiction in which the Notes have been
qualified as above provided. The Company will promptly advise the Agents of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Notes for sale in any such state or jurisdiction or the
initiating or threatening of any proceeding for such purpose.
(k) 1934 ACT FILINGS. The Company, during the period when the Prospectus
is required to be delivered under the 1933 Act, will file promptly all documents
required to be filed with the Commission pursuant to Sections 13(a), 13(c), 14
or 15(d) of the 1934 Act. Such documents will comply in all material respects
with the requirements of the 1934 Act and the 1934 Act Regulations and to the
extent such documents are incorporated by reference in the Prospectus, when read
together with the other information in or incorporated by reference into the
Prospectus, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
are made, not misleading.
(l) STAND-OFF AGREEMENT. If required pursuant to the terms of a Terms
Agreement, between the date of any Terms Agreement and the Settlement Date with
respect to such Terms Agreement, the Company will not, without the prior written
consent of each Agent party to such Terms Agreement, directly or indirectly,
sell, offer to sell, contract to sell, grant any option for the sale of or
otherwise dispose of, or announce the offering of, any debt securities of the
Company (other than the Notes that are to be sold pursuant to such Terms
Agreement and commercial paper or borrowings from commercial banks or affiliates
of the Company in the ordinary course of business), except as may otherwise be
provided in any such Terms Agreement.
(m) SUSPENSION OF CERTAIN OBLIGATIONS. The Company shall not be required
to comply with the provisions of subsections (e), (f) or (g) of this Section or
the provisions of Section 7 hereof during any period from the time (i) the
Agents shall have been notified by the Company to suspend solicitation of offers
to purchase the Notes in their capacity as agents and (ii) the earlier of the
date on which no Agent shall then hold any Notes as principal purchased pursuant
to a Terms Agreement and the date which is 30 days (nine months with respect to
subsection (e)
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of this Section) from the date on which the Agents shall have received written
notice from the Company to suspend solicitation of purchases of the Notes, to
the time the Company shall determine that solicitation of offers to purchase the
Notes should be resumed or shall subsequently enter into a new Terms Agreement
with any Agent.
SECTION 5. CONDITIONS OF AGENTS' OBLIGATIONS.
The obligations of the several Agents hereunder to solicit offers to
purchase the Notes as agents of the Company, the obligations of any purchasers
of the Notes sold through the Agents as agents, and any obligation of the Agents
to purchase Notes as principals pursuant to a Terms Agreement or otherwise will
be subject to the accuracy of the representations and warranties on the part of
the Company herein and to the accuracy of the statements of the Company's
officers made in any certificate furnished pursuant to the provisions hereof, to
the performance and observance by the Company of all its covenants and
agreements herein contained and to the following further conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and as of
the date hereof no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Agents. If the Company has elected to
rely upon Rule 434, a Term Sheet shall have been filed with the Commission in
accordance with Rule 424(b).
(1) OPINION OF CONNIE C. HOLBROOK. On the date hereof, the Agents
shall have received the favorable opinion, in form and substance reasonably
satisfactory to the Agents, dated as of the date hereof, of Connie C. Holbrook,
counsel for the Company, who may rely as to all matters governed by Federal and
New York law upon the opinion of Skadden, Arps, Slate, Meagher & Flom LLP
referred to below, to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Utah.
(ii) The Company has corporate power and authority to own its
properties and conduct its business as described in the Prospectus;
and the Company is duly qualified to do business as a foreign
corporation and is in good standing in all other jurisdictions in
which it owns or leases substantial properties or in which the conduct
of its business requires such qualification, except where the failure
to be so qualified would not have a Material Adverse Effect.
(iii) The offering, sale and issuance of the Notes has been duly
authorized by the requisite corporate action on the part of the
Company and, the Notes, when executed and authenticated by the Trustee
in accordance with the terms of the Indenture, will be valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except to the extent that enforcement
thereof may be limited by (a) bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or other similar laws now or
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hereinafter in effect relating to or affecting creditors' rights
generally and (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity); in
expressing the opinion set forth in this paragraph (iii), such counsel
may assume that the Trustee's certificate of authentication of the
Notes will be manually signed by one of the Trustee's authorized
officers and that the Notes, when issued, will conform to the forms of
the Notes examined by such counsel, which facts need not be verified
by an inspection of the individual Notes.
(iv) The execution, delivery and performance of the Indenture and
of this Agreement and any applicable Terms Agreement and the issuance
and sale of the Notes and compliance with the terms and provisions
hereof and thereof will not (a) result in a breach or violation of any
of the terms or provisions of, or constitute a default under (1) any
order known to such counsel of any governmental agency having
jurisdiction over the Company or any of its properties or any
agreement or instrument known to such counsel to which the Company is
a party or by which the Company is bound or to which any of the
properties of the Company is subject, which would cause a material
adverse change in the financial position, shareholders' equity or
results of operations of the Company or affect the validity of the
Notes or the legal authority of the Company to comply with the terms
of the Notes, the Indenture, this Agreement or any applicable Terms
Agreement or (2) the charter or by-laws of the Company or (b) result
in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any subsidiary pursuant to
any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or any other agreement or instrument, known to
such counsel, to which the Company or any subsidiary is a party or by
which it or any of them may be bound, or to which any of the property
or assets of the Company or any subsidiary is subject (except for such
liens, charges or encumbrances that would not have a Material Adverse
Effect); and the Company has full power and authority to authorize,
issue and sell the Notes as contemplated by this Agreement and any
applicable Terms Agreement.
(v) The Indenture has been duly authorized, executed and
delivered by the Company and (assuming the due authorization,
execution and delivery of the Indenture by the Trustee) is a valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except to the extent enforcement thereof
may be limited by (a) bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws now or hereinafter in
effect relating to or affecting creditors' rights generally, and (b)
general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
(vi) This Agreement and any applicable Terms Agreement have each
been duly authorized, executed and delivered by the Company.
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(vii) No authorization, approval or consent of any governmental
authority or agency is necessary in connection with the transactions
contemplated by this Agreement and any applicable Terms Agreement,
except such as may be required under the 1933 Act, the 1939 Act, state
securities or Blue Sky laws, and except as have been obtained.
(viii) The documents incorporated by reference in the Prospectus
(other than the financial statements and supporting schedules included
therein or omitted therefrom, as to which such counsel need express no
opinion), when they were filed with the Commission complied as to form
in all material respects with the requirements of the 1934 Act and the
1934 Act Regulations.
(2) OPINION OF COMPANY COUNSEL. On the date hereof, the Agents shall
have received the favorable opinion, dated as of the date hereof, of
Skadden, Arps, Slate, Meagher & Flom LLP, special counsel for the Company,
in form and substance reasonably satisfactory to counsel for the Agents, to
the effect that:
(i) The Notes, when approved for issuance, executed and
authenticated in accordance with the terms of the Indenture and paid
for by the purchasers thereof, will be valid and binding obligations
of the Company under the laws of the State of New York, enforceable
against the Company in accordance with their terms, except to the
extent that enforcement thereof may be limited by (a) bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other
similar laws now or hereinafter in effect relating to or affecting
creditors' rights generally and (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding at
law or in equity); in expressing the opinion set forth in this
paragraph (i), such counsel may assume that the Trustee's certificates
of authentication of the Notes will be manually signed by one of the
Trustee's authorized officers and that the Notes, when issued, will
conform to the forms thereof, examined by such counsel, which facts
need not be verified by an inspection of the individual Notes.
(ii) The Notes and the Indenture conform in all material respects
to the descriptions thereof contained in the Prospectus; in this
connection such counsel may note that the interest rate, maturity,
redemption and other terms for each issuance of the Notes are to be
established as provided for in the Indenture and described in a
pricing supplement, as contemplated by the Prospectus.
(iii) The Indenture has been duly executed and delivered by the
Company (to the extent such execution and delivery are matters
governed by the laws of the State of New York) and (assuming the due
authorization, execution and delivery of the Indenture by the Trustee)
is a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms under the laws of the State
of New York, except to the extent enforcement thereof may be limited
by (a) bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws now or hereinafter in effect relating
to or affecting creditors' rights generally and (b) general principles
of equity
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(regardless of whether enforceability is considered in a proceeding at
law or in equity).
(iv) This Agreement and any applicable Terms Agreement have each
been duly executed and delivered by the Company (to the extent such
execution and delivery are matters governed by the laws of the State
of New York).
(v) The Registration Statement and the Prospectus, as of their
respective effective or issue dates (but excluding the Form T-1 and
the financial statements and the related notes, schedules and other
financial data included or incorporated by reference in or excluded
from the Registration Statement or the exhibits thereto, as to which
such counsel need express no opinion), appeared on their face to be
appropriately responsive in all material respects to the requirements
of the 1933 Act and the 1933 Act Regulations, as applicable, except
that such counsel need not assume any responsibility for the accuracy,
completeness or fairness of the statements contained or incorporated
by reference in the Registration Statement or the Prospectus except to
the extent set forth in paragraph (viii) below.
(vi) Such counsel does not know of any legal or governmental
proceedings required to be disclosed in the Registration Statement or
the Prospectus pursuant to Regulation S-K of the 1933 Act Regulations
which are not disclosed as required, nor of any contracts or documents
required to be filed as exhibits to the Registration Statement which
are not filed as required.
(vii) No authorization, approval or consent of any governmental
authority or agency is necessary in connection with the consummation
by the Company of the transactions contemplated by this Agreement and
any applicable Terms Agreement, except such as may be required by the
1933 Act, the 1939 Act, state securities or Blue Sky laws, and other
than any that has been obtained.
(viii) The statements set forth in the Prospectus under the
caption "Description of the Medium-Term Notes", insofar as such
statements purport to summarize certain provisions of the documents
referred to therein, fairly summarize such provisions in all material
respects.
(3) OPINION OF COUNSEL TO THE AGENTS. The opinion of Sidley Austin
Brown & Wood LLP, counsel to the Agents, who may rely as to all matters
governed by Utah law upon the opinion of Connie C. Holbrook, referred to
above, covering the matters referred to in subparagraph (1) under the
subheading (i) and subparagraph (2) under the subheadings (i) through (v),
inclusive, above.
(4) In giving their opinions as of the date hereof required by
subsection (a)(2) and (a)(3) of this Section, Skadden, Arps, Slate, Meagher
& Flom LLP and Sidley Austin Brown & Wood LLP shall each additionally state
the time and date on which Registration Statement was declared effective
under the 1933 Act, or if such counsel have not received an effectiveness
order from the Commission, that such counsel have been
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advised by the Commission of the time and date on which the Registration
Statement was declared effective and the Indenture was qualified under the
Trust Indenture Act and, to the best of such counsel's knowledge, that no
stop order suspending the Registration Statement's effectiveness has been
issued and no proceedings for that purpose have been instituted or are
pending or threatened by the Commission. In addition, each such counsel
(other than Connie C. Holbrook) shall state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent accountants of the Company, and the
Agents, at which the contents of the Registration Statement and the
Prospectus and related matters were discussed and, although such counsel
are not passing upon, and do not assume any responsibility for, the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus and have made no independent check
or verification thereof, on the basis of the foregoing, no facts have come
to such counsel's attention that lead them to believe that the Registration
Statement, at the time it became effective, and if an amendment to the
Registration Statement or an Annual Report on Form 10-K has been filed by
the Company with the Commission subsequent to the effectiveness of the
Registration Statement and prior to the date of such statement, then at the
time such amendment became effective or at the time of the most recent such
filing (to the extent deemed to be incorporated by reference in the
Registration Statement and Prospectus), or (if such opinion is being
delivered in connection with a Terms Agreement pursuant to Section 7(c)
hereof) at the date of any Terms Agreement and at the Settlement Date with
respect thereto, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading
or that the Prospectus, as amended or supplemented at the date hereof, or
(if such opinion is being delivered in connection with a Terms Agreement
pursuant to Section 7(c) hereof) at the date of any Terms Agreement and at
the Settlement Date with respect thereto, as the case may be, contains or
contained an untrue statement of a material fact or omits or omitted to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
Such counsel may state that they express no opinion or belief with respect
to the Form T-1 or to the financial statements and the related notes,
schedules and other financial data included in or excluded from the
Registration Statement or the exhibits thereto or incorporated by reference
in such Registration Statement or Prospectus.
(b) OFFICER'S CERTIFICATE. At the date hereof the Agents shall have
received a certificate of the President or any Vice President and a principal
financial or accounting officer of the Company, dated as of the date hereof, to
the effect that (i) since the respective dates as of which information is given
in the Registration Statement and the Prospectus or since the date of any
applicable Terms Agreement, there has not been any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, (ii) the
other representations and warranties of the Company contained in Section 2
hereof are true and correct with the same force and effect as though expressly
made at and as of the date of such certificate, (iii) the Company has complied
with all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the date of such certificate, and (iv) no stop order
suspending the effectiveness of the Registration Statement
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under the 1933 Act has been issued and no proceedings for that purpose have been
initiated or threatened by the Commission. As used in this Section 5(b), the
term "Prospectus" means the Prospectus in the form first provided to the
applicable Agent or Agents for use in confirming sales of the Notes.
(c) COMFORT LETTER. On the date hereof, the Agents shall have received a
letter from Ernst & Young LLP, dated as of the date hereof and in form and
substance reasonably satisfactory to the Agents, to the effect that:
(i) They are independent public accountants with respect to the
Company and its subsidiaries within the meaning of the 1933 Act and the
1933 Act Regulations and no information concerning their relationship with
or interest in the Company is required by Item 10 of the Registration
Statement.
(ii) It is their opinion that the consolidated financial statements
and supporting schedules included or incorporated by reference in the
Registration Statement and covered by their opinions incorporated therein
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations.
(iii) They have read any unaudited financial statements included in
the Registration Statement and Prospectus.
(iv) On the basis of the reading referred to in clause (iii) above, a
reading of the latest available interim financial statements of the
Company, inquiries of officials of the Company who have responsibility for
financial and accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that: (A) the unaudited
financial statements, if any, included or incorporated by reference in the
Registration Statement and Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the 1933
Act, the 1933 Act Regulations, the 1934 Act and the regulations promulgated
under the 1934 Act or are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that
of the audited financial statements included or incorporated by reference
therein; (B) at the date of the latest available balance sheet read by such
accountants, or at a subsequent specified date not more than five days
prior to the date of such letter, there was any change in the capital stock
or any increase in the short-term indebtedness or long-term debt of the
Company or, at the date of the latest available balance sheet read by such
accountants, or at a subsequent specified date not more than five days
prior to the date of such letter, there was any decrease in the net current
assets or net assets, in each case as compared with amounts shown in the
latest balance sheet included or incorporated by reference in the
Prospectus; or (C) for the twelve-month period ending on the closing date
of the latest available income statement read by such accountants, or from
such latest available income statement read by such accountants to a
specified date not more than five days prior to the date of such letter,
there were any decreases, as compared with the corresponding period of the
previous year, in total revenues, operating income or income (in each case,
from continuing operations), or (with respect only to quarterly accounting
periods) in the ratio of earnings
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to fixed charges; except in all cases set forth in clauses (B) and (C)
above for changes, increases or decreases which the Prospectus discloses
have occurred or may occur.
(v) They have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information included
or incorporated by reference in the Registration Statement and the
Prospectus (in each case to the extent that such dollar amounts,
percentages and other financial information are derived from the general
accounting records of the Company and its subsidiaries subject to the
internal controls of the Company's accounting system or are derived
directly from such records by analysis or computation) with the results
obtained from inquiries, a reading of such general accounting records and
other procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in agreement
with such results.
(d) OTHER DOCUMENTS. On the date hereof and on each Settlement Date with
respect to any applicable Terms Agreement, counsel to the Agents shall have been
furnished with such documents and opinions as such counsel may reasonably
require for the purpose of enabling such counsel to pass upon the issuance and
sale of Notes as herein contemplated and related proceedings, or in order to
evidence the accuracy and completeness of any of the representations and
warranties or the fulfillment of any of the conditions herein contained.
If any condition specified in this Section 5 shall not have been fulfilled
when and as required to be fulfilled, this Agreement (or, at the option of the
Agent party thereto, any applicable Terms Agreement) may be terminated by any of
the Agents (as to itself only) by notice to the Company at any time and any such
termination shall be without liability of any party to any other party, except
that the covenant regarding provision of an earnings statement set forth in
Section 4(h) hereof, the provisions concerning payment of expenses under Section
10 hereof, the indemnity and contribution agreements set forth in Sections 8 and
9 hereof, the provisions concerning the representations, warranties and
agreements to survive delivery set forth in Section 11 hereof, the provisions
relating to governing law and forum set forth in Section 14 and the provisions
set forth under "Parties" of Section 15 hereof shall remain in effect.
SECTION 6. DELIVERY OF AND PAYMENT FOR NOTES SOLD THROUGH THE AGENTS.
Delivery of Notes sold through an Agent as agent shall be made by the
Company to such Agent for the account of any purchaser only against payment
therefor in immediately available funds. In the event that a purchaser shall
fail either to accept delivery of or to make payment for a Note on the date
fixed for settlement, the Agent shall promptly notify the Company and deliver
the Note to the Company, and, if the Agent has theretofore paid the Company for
such Note, the Company will promptly return such funds to the Agent. If such
failure occurred for any reason other than default by the Agent in the
performance of its obligations hereunder, the Company will reimburse such Agent
on an equitable basis for its reasonable loss of the use of the funds for the
period such funds were credited to the Company's account.
SECTION 7. ADDITIONAL COVENANTS OF THE COMPANY.
The Company covenants and agrees with the Agents that:
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(a) REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. Each acceptance by it
of an offer for the purchase of Notes, and each delivery of Notes to one or more
of the Agents pursuant to a Terms Agreement, shall be deemed to be an
affirmation that the representations and warranties of the Company contained in
this Agreement and in any certificate theretofore delivered to the Agents
pursuant hereto are true and correct at the time of such acceptance or sale, as
the case may be, and an undertaking that such representations and warranties
will be true and correct at the time of delivery to the purchaser or his agent,
or to the Agent or Agents, of the Note or Notes relating to such acceptance or
sale, as the case may be, as though made at and as of each such time (and it is
understood that such representations and warranties shall relate to the
Registration Statement and Prospectus as amended and supplemented to each such
time).
(b) SUBSEQUENT DELIVERY OF CERTIFICATES. Subject to the provisions of
Section 4(l) hereof, each time that the Registration Statement or the Prospectus
shall be amended or supplemented (other than by an amendment or supplement
providing solely for the establishment of or a change in the interest rates,
maturity or price of Notes or similar changes or an amendment or supplement
which relates exclusively to an offering of debt securities other than the
Notes), or there is filed with the Commission any document incorporated by
reference into the Prospectus or (if required pursuant to the terms of a Terms
Agreement) the Company sells Notes to one or more Agents pursuant to a Terms
Agreement, the Company shall furnish or cause to be furnished to the Agents as
soon as practicable a certificate dated the date of filing with the Commission
of such supplement or document, the date of effectiveness of such amendment, or
the date of such sale, as the case may be, in form satisfactory to the Agents
and to counsel to the Agents to the effect that the statements contained in the
certificate referred to in Section 5(b) hereof which was last furnished to the
Agents are true and correct at the time of such amendment, supplement, filing or
sale, as the case may be, as though made at and as of such time (except that
such statements shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such time) or, in lieu of such
certificate, a certificate of the same tenor as the certificate referred to in
said Section 5(b), modified as necessary to relate to the Registration Statement
and the Prospectus as amended and supplemented to the time of delivery of such
certificate.
(c) SUBSEQUENT DELIVERY OF LEGAL OPINIONS. Subject to the provisions of
Section 4(l) hereof and unless the Agents shall otherwise specify, each time
that the Registration Statement or the Prospectus shall be amended or
supplemented (other than by an amendment or supplement providing solely for the
establishment of or a change in the interest rates, maturity or price of the
Notes or similar changes or an amendment or supplement which relates exclusively
to an offering of debt securities other than the Notes), or there is filed with
the Commission any document incorporated by reference into the Prospectus, or,
if required pursuant to the terms of a Terms Agreement, the Company sells Notes
to one or more Agents pursuant to a Terms Agreement, the Company shall furnish
or cause to be furnished as soon as practicable to the Agents and to counsel to
the Agents a written opinion of each of Connie C. Holbrook, counsel for the
Company and Skadden, Arps, Slate, Meagher & Flom LLP, special counsel for the
Company, or other counsel satisfactory to the Agents dated the date of filing
with the Commission of such supplement or document, the date of effectiveness of
such amendment, or the date of such sale, as the case may be, in form and
substance satisfactory to the Agents and to counsel to the Agents, of the same
tenor as the opinions referred to in Section 5(a)(1), 5(a)(2) and 5(a)(5)
hereof, but modified, as necessary, to relate to the Registration Statement and
the
20
<Page>
Prospectus as amended and supplemented to the time of delivery of such opinions;
or, in lieu of such opinions, counsel last furnishing such opinion to the Agents
shall furnish the Agents with a letter substantially to the effect that the
Agents may rely on such last opinion to the same extent as though it was dated
the date of such letter authorizing reliance (except that statements in such
last opinion shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of such letter
authorizing reliance).
(d) SUBSEQUENT DELIVERY OF COMFORT LETTERS. Subject to the provisions of
Section 4(l) hereof and unless the Agents shall otherwise specify, each time
that the Registration Statement or the Prospectus shall be amended or
supplemented to include additional financial information or there is filed with
the Commission any document incorporated by reference into the Prospectus which
contains additional financial information or, (if required pursuant to the terms
of a Terms Agreement) the Company sells Notes to one or more Agents pursuant to
a Terms Agreement, the Company shall cause Ernst & Young LLP or other
independent certified public accountants reasonably satisfactory to the Agents,
as soon as practicable to furnish the Agents a letter, dated the date of the
date of filing with the Commission of such supplement or document, the date of
effectiveness of such amendment, or the date of such sale, as the case may be,
in form reasonably satisfactory to the Agents, of the same tenor as the letter
referred to in Section 5(c) hereof but modified to relate to the Registration
Statement and Prospectus, as amended and supplemented to the date of such
letter, and with such changes as may be necessary to reflect changes in the
financial statements and other information derived from the accounting records
of the Company; PROVIDED, HOWEVER, that if the Registration Statement or the
Prospectus is amended or supplemented solely to include financial information as
of and for a fiscal quarter, Ernst & Young LLP may limit the scope of such
letter to the unaudited financial statements included in such amendment or
supplement unless any other information included therein of an accounting,
financial or statistical nature is of such a nature that, in the reasonable
judgment of the Agents, such letter should cover such other information.
SECTION 8. INDEMNIFICATION.
(a) INDEMNIFICATION OF THE AGENTS. The Company agrees to indemnify and
hold harmless each Agent and each person, if any, who controls any Agent within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as
follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus (or
any amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or
21
<Page>
threatened, or of any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or omission, if such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred, (including,
subject to Section 8(c) hereof, the fees and disbursements of counsel
chosen by each Agent), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under (i) or (ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company or
special counsel to the Company by or on behalf of any Agent expressly for use in
the Registration Statement (or any amendment thereto), or the Prospectus (or any
amendment or supplement thereto). The foregoing indemnity with respect to any
untrue statement contained in or omitted from a preliminary prospectus shall not
inure to the benefit of any Agent (or any person controlling such Agent) from
whom the person asserting any such loss, liability, claim, damage or expense
purchased any of the Notes which are the subject thereof if such person did not
receive a copy of the Prospectus (or any amendment or supplement thereto) (in
each case exclusive of the documents from which information is incorporated by
reference) at or prior to the written confirmation of the sale of such Notes to
such person and the untrue statement contained in or omission from such
preliminary prospectus was corrected in the Prospectus (or any amendment or
supplement thereto).
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS. Each Agent
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto) including the Rule 424 Information, if applicable, or
the Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Agent expressly for use in the Registration Statement (or any amendment
thereto) or the Prospectus (or any amendment or supplement thereto) and will
reimburse any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such loss, liability, claim,
damage, expense or action as such expenses are incurred.
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from
22
<Page>
any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 8(a) above,
counsel to the indemnified parties shall be selected by the Agents, and, in the
case of parties indemnified pursuant to Section 8(b) above, counsel to the
indemnified parties shall be selected by the Company. If it so elects within a
reasonable time after receipt of such notice, an indemnifying party, jointly
with any other indemnifying parties receiving such notice, may assume the
defense of such action with counsel chosen by it and approved by the indemnified
parties defendant in such action (which approval shall not be unreasonably
withheld), unless such indemnified parties reasonably object to such assumption
on the ground that there may be legal defenses available to them which are
different from or in addition to those available to such indemnifying party. If
an indemnifying party assumes the defense of such action, the indemnifying party
shall not be liable for any fees and expenses of counsel for the indemnified
parties incurred thereafter in connection with such action other than the
reasonable costs of investigation. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 8 or Section 9 hereof (whether or not the indemnified parties
are actual or potential parties hereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 8(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement. Notwithstanding the immediately preceding sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 8(a)(ii)
effected without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent it considers
such request to be reasonable and (ii) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement.
SECTION 9. CONTRIBUTION. If the indemnification provided for in Section 8
hereof is for any reason (except as provided therein) unavailable to or
insufficient to hold harmless an
23
<Page>
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Agents on the other hand from the offering of the Notes pursuant to
this Agreement or (ii) if the allocation provided by clause (i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and of the Agents on the other hand in connection
with the statements or omissions which resulted in such losses, liabilities,
claims, damages or expenses, as well as any other relevant equitable
considerations.
The relative benefits received by the Company on the one hand and the
Agents on the other hand in connection with the offering of the Notes pursuant
to this Agreement shall be deemed to be in the same respective proportions as
the total net proceeds from the offering of the Notes pursuant to this Agreement
(before deducting expenses) received by the Company and the total underwriting
discount received by the Agents, in each case as set forth on the cover of the
Prospectus, or, if Rule 434 is used, the corresponding location on the Term
Sheet, bear to the aggregate initial public offering price of the Notes as set
forth on such cover.
The relative fault of the Company on the one hand and the Agents on the
other hand shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Agents and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Agents agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro rata allocation
(even if the Agents were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this Section 9. The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an indemnified party and
referred to above in this Section 9 shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.
Notwithstanding the provisions of this Section 9, no Agents shall be
required to contribute any amount in excess of the amount by which the total
price at which the Notes underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Agents has
otherwise been required to pay by reason of any such untrue or alleged untrue
statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
24
<Page>
For purposes of this Section 9, each person, if any, who controls an Agent
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as such Agent, and each director of
the Company, each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company. The Agents' respective obligations to contribute
pursuant to this Section 9 are several in proportion to the principal amount of
Notes set forth opposite their respective names in Schedule A hereto and not
joint.
SECTION 10. PAYMENT OF EXPENSES.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(a) The printing and filing of the Registration Statement as originally
filed and each amendment thereto and the Prospectus and any amendments or
supplements thereto;
(b) The preparation, filing and reproduction of this Agreement;
(c) The preparation, printing, issuance and delivery of the Notes,
including any fees and expenses relating to the use of book-entry notes;
(d) The fees and disbursements of the Company's accountants and counsel,
of the Trustee and its counsel, and of any Calculation Agent;
(e) The reasonable fees and disbursements of counsel to the Agents
incurred from time to time in connection with the transactions contemplated
hereby;
(f) The qualification of the Notes under state securities laws in
accordance with the provisions of Section 4(i) hereof, including filing fees and
the fees and disbursements of counsel for the Agents in connection therewith and
in connection with the preparation of any Blue Sky Survey and any Legal
Investment Survey;
(g) The printing and delivery to the Agents of copies of the Registration
Statement and any amendments thereto, and of the Prospectus and any amendments
or supplements thereto, and the delivery by the Agents of the Prospectus and any
amendments or supplements thereto in connection with solicitations or
confirmations of sales of the Notes;
(h) The preparation, printing, reproducing and delivery to the Agents of
copies of the Indenture and all supplements and amendments thereto;
(i) Any fees charged by rating agencies for the rating of the Notes;
(j) The fees and expenses, if any, incurred with respect to any filing
with the National Association of Securities Dealers, Inc.;
(k) Any advertising and other out-of-pocket expenses of the Agent incurred
with the prior written approval of the Company;
25
<Page>
(l) The cost of providing any CUSIP or other identification numbers for
the Notes; and
(m) The fees and expenses of any Depositary (as defined in the Indenture)
and any nominees thereof in connection with the Notes.
SECTION 11. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement
or in certificates of officers of the Company or any of its subsidiaries
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Agent or controlling
person of, or by or on behalf of the Company, and shall survive each delivery of
and payment for any of the Notes.
SECTION 12. TERMINATION.
(a) TERMINATION OF THIS AGREEMENT. The Agents may terminate this Agreement
(excluding any Terms Agreement) by notice to the Company at any time at or prior
to the Settlement Date relating thereto; PROVIDED, HOWEVER, that the termination
of this Agreement by an Agent shall terminate this Agreement only between such
Agent and the Company and the Company's notice of termination as to any one
Agent shall terminate this Agreement only between itself and such Agent.
(b) TERMINATION OF A TERMS AGREEMENT. The Agent or Agents party to a Terms
Agreement may terminate any Terms Agreement, immediately upon notice to the
Company, at any time prior to the Settlement Date relating thereto (i) if there
has been, since the date of such Terms Agreement or since the respective dates
as of which information is given in the Registration Statement, any material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse change in the
financial markets in the United States or any outbreak of hostilities or
escalation thereof or other calamity or crisis, in each case the effect of which
is such as to make it, in the reasonable judgment of the Agent or Agents party
to such Terms Agreement, impracticable to market the Notes subject to such Terms
Agreement or enforce contracts for the sale of such Notes, or (iii) if trading
in the Notes has been suspended or materially limited by the Commission, or if
trading generally on either the American Stock Exchange or the New York Stock
Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by any of said exchanges or
by such system has or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or (iv) if a
banking moratorium shall have been declared by either Federal, New York or Utah
authorities or (iv) the rating assigned by any nationally recognized statistical
rating organization to the Program or any debt securities (including the Notes)
of the Company as of the date of such agreement shall have been lowered since
that date or if any such rating organization shall have publicly announced that
it has under surveillance or review, with possible negative implications, its
rating of the Program or any debt securities (including the Notes) of the
Company, or (v) if there shall have come to the Agent's or
26
<Page>
Agents' attention any facts that would cause such Agent or Agents to believe
that the Prospectus, at the time it was required to be delivered to a purchaser
of Notes, contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light of the
circumstances existing at the time of such delivery, not misleading. As used in
this Section 12(b), the term "Prospectus" means the Prospectus in the form first
provided to the applicable Agent or Agents for use in confirming sales of the
related Notes.
(c) GENERAL. In the event of any such termination, neither party will have
any liability to the other party hereto, except that (i) each Agent shall be
entitled to any commission earned in accordance with the third paragraph of
Section 3(a) hereof, (ii) if at the time of termination (a) the Agents shall own
any Notes purchased pursuant to a Terms Agreement with the intention of
reselling them or (b) an offer to purchase any of the Notes has been accepted by
the Company but the time of delivery to the purchaser or his agent of the Note
or Notes relating thereto has not occurred, the covenants set forth in Sections
4 and 7 hereof shall remain in effect until such Notes are so resold or
delivered, as the case may be, and (iii) the covenant set forth in Section 4(h)
hereof, the provisions of Section 10 hereof, the indemnity and contribution
agreements set forth in Sections 8 and 9 hereof, and the provisions of Sections
11 and 15 hereof shall remain in effect.
SECTION 13. NOTICES.
Unless otherwise provided herein, all notices required under the terms and
provisions hereof shall be in writing, either delivered by hand, by mail or by
telex, telecopier or telegram, and any such notice shall be effective when
received at the address specified below.
If to the Company:
Questar Gas Company
180 East 100 South Street
P.O. Box 45360
Salt Lake City, Utah 84145-0360
Attention: Vice President, Treasurer and
Chief Financial Officer
Telecopy: (801) 324-5483
If to Merrill Lynch:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
4 World Financial Center, 15th Floor
New York, New York 10080
Attention: MTN Product Management,
Telecopy: (212) 449-2234
27
<Page>
If to Banc One Capital Markets, Inc.:
Banc One Capital Markets, Inc.
One Banc One Plaza
Suite IL 1-0595, 8th Floor
Chicago, Illinois 60670
Attention: Investment Grade Securities
Telecopy: (312) 732-4773
If to U.S. Bancorp Piper Jaffray Inc.:
U.S. Bancorp Piper Jaffray Inc.
U.S. Bancorp Tower
111 S.W. Fifth Avenue, Suite 1900
Portland, Oregon 97204
Attention: Michael Malmquist
Telecopy: (503) 275-3490
or at such other address as such party may designate from time to time by notice
duly given in accordance with the terms of this Section 13.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. PARTIES.
This Agreement shall inure to the benefit of and be binding upon the Agents
and the Company and their respective successors. Nothing expressed or mentioned
in this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the parties hereto and their respective successors and
the controlling persons and officers and directors referred to in Sections 8 and
9 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the parties hereto and their
respective successors and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Notes shall be deemed to be a
successor by reason merely of such purchase.
SECTION 16. CAPTIONS.
The captions in this Agreement are for convenience of reference only and
shall not define or limit any of the terms or provisions hereof.
If the foregoing is in accordance with the Agents' understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument along with all
28
<Page>
counterparts will become a binding agreement between the Agents and the Company
in accordance with its terms.
Very truly yours,
QUESTAR GAS COMPANY
By:
-------------------------------------
Name: Stephen E. Parks
Title: Vice President, Treasurer and
Chief Financial Officer
29
<Page>
This Agreement has been agreed to, accepted and executed as of the date
first written above.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
-------------------------------------
Name:
Title:
BANC ONE CAPITAL MARKETS, INC.
By:
-------------------------------------
Name:
Title:
U.S. BANCORP PIPER JAFFRAY INC.
By:
-------------------------------------
Name:
Title:
30
<Page>
EXHIBIT A
Questar Gas Company
180 East 100 South Street
Salt Lake City, Utah 84145
Re: Distribution Agreement by and among Questar Gas Company, Merrill Lynch
& Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc One
Capital Markets, Inc. and U.S. Bancorp Piper Jaffray Inc. dated ______
__, 2001
[The undersigned agrees to purchase the following principal amount of the
Medium-Term Notes, Series D, referred to in the above-mentioned Agreement:
$100,000,000]
[The undersigned agrees to purchase the aggregate principal amount of
Medium-Term Notes, Series D, referred to in the above-mentioned Agreement set
forth below:]
<Table>
[Merrill Lynch, Pierce, Fenner & Smith
Incorporated ............................. $________________]
[Banc One Capital Markets, Inc......................... $________________]
[U.S. Bancorp Piper Jaffray Inc........................ $________________]
</Table>
The terms of such Medium-Term Notes, Series D, shall be as set forth below.
Interest Rate:
If Fixed Rate Note:
Interest Rate:
Interest Payment Dates (if other than April 1 and October 1):
Regular Record Dates (if other than March 15 and September 15):
If Floating Rate Note:
Base Rate or Rates:
Initial Interest Rate:
Initial Interest Reset Date:
Spread, if any:
Spread Multiplier, if any:
Interest Reset Date(s):
Interest Payment Date(s):
Index Maturity:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Interest Payment Period:
Interest Reset Period:
31
<Page>
Calculation Agent (if other than Wells Fargo Bank Northwest,
National Association (f/k/a First Security Bank, N.A.):
If Redeemable:
Redemption Commencement Date:
Redemption Percentage:
Annual Redemption Percentage:
If Repayable:
Optional Repayment Date(s):
Principal Amount: $_____
Stated Maturity:
Trade Date:
Issue Price: ___%
Agent's Discount or Commission:
Original Issue Date:
Settlement Date and Time:
Additional Terms:
The Certificate referred to in Section 7(b), the opinions of counsel
referred to in Section 7(c) and the accountants' letter referred to in Section
7(d) of the above-mentioned Agreement will [not] be required, and the stand-off
agreement set forth in Section 4(k) of the above-mentioned Agreement will [not]
be applicable.
This Agreement and all of the rights and obligations of the parties hereto
shall be governed by and construed in accordance with the laws of the State of
New York applicable to agreements made and to be performed in such State.
32
<Page>
If the foregoing is in accordance with our agreement, please indicate your
acceptance hereof in the space provided for that purpose below.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
-------------------------------------
Authorized Signatory
BANC ONE CAPITAL MARKETS, INC.
By:
-------------------------------------
Authorized Signatory
U.S. BANCORP PIPER JAFFRAY INC.
By:
-------------------------------------
Authorized Signatory
CONFIRMED AND ACCEPTED,
as of the date first above written.
QUESTAR GAS COMPANY
By:
---------------------------------
Name:
Title:
<Page>
SCHEDULE A
As compensation for the services of the Agents hereunder, the Company shall
pay the related Agent, on a discount basis, a commission for the sale of each
Note by such Agent equal to the principal amount of such Note multiplied by the
appropriate percentage set forth below:
<Table>
<Caption>
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT
- --------------- ----------------
%
From 9 months to less than 1 year ........... .125
From 1 year to less than 18 months .......... .150
From 18 months to less than 2 years ......... .200
From 2 years to less than 3 years ........... .250
From 3 years to less than 4 years ........... .350
From 4 years to less than 5 years ........... .450
From 5 years to less than 6 years ........... .500
From 6 years to less than 7 years ........... .550
From 7 years to less than 10 years .......... .600
From 10 years to less than 15 years ......... .625
From 15 years to less than 20 years ......... .700
From 20 years to 30 years ................... .750
</Table>
<Page>
EXHIBIT B
QUESTAR GAS COMPANY
ADMINISTRATIVE PROCEDURES
Medium-Term Notes, Series D
(Dated as of ______ ___, 2001)
Medium-Term Notes, Series D (the "Notes") are to be offered on a continuing
basis by Questar Gas Company (the "Company") through Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc One Capital Markets,
Inc., U.S. Bancorp Piper Jaffray Inc. who, as agents (each an "Agent", and
collectively, the "Agents"), have agreed to use their reasonable efforts to
solicit offers to purchase the Notes from the Company. The Agents may also
purchase Notes as principal for resale.
The Notes are being sold pursuant to a Distribution Agreement by and among
the Company and the Agents, dated ________ __, 2001 (the "Distribution
Agreement"). Additionally, the Company has reserved the right to sell Notes on
its own behalf directly to purchasers. The Notes will be issued as a series of
securities under the Indenture (the "Indenture"), dated as of May 1, 1992,
between the Company and Wells Fargo Bank Northwest, National Association
(formerly known as First Security Bank, N.A.), successor trustee to Citibank,
N.A. (the "Trustee"). A Registration Statement (the "Registration Statement",
which term shall include any additional registration statements filed in
connection with the Notes as provided in the introductory paragraph of the
Distribution Agreement) with respect to the Notes has been filed with the
Securities and Exchange Commission (the "Commission"). The most recent basic
Prospectus included in the Registration Statement, as supplemented with respect
to the Notes, is herein referred to as the "Prospectus". The most recent
supplement to the Prospectus with respect to the specific terms of the Notes is
herein referred to as the "Pricing Supplement".
Unless otherwise specified in the applicable Pricing Supplement, each Note
will be issued (a) fully registered in book-entry form (each, a "Book-Entry
Note") delivered to the Trustee, as agent for The Depository Trust Company
("DTC"), and recorded in the book-entry system maintained by DTC, or (b) in
registered definitive form (each, a "Definitive Note") delivered to the
purchaser thereof or a person designated by such purchaser. Owners of beneficial
interests in Notes issued in book-entry form will be entitled to physical
delivery of Notes in definitive form equal in principal amount to their
respective beneficial interests only upon certain limited circumstances
described in the Prospectus.
General procedures relating to the issuance of all Notes are set forth
in Part I hereof. Additionally, Notes issued in book-entry form will be
issued in accordance with the procedures set forth in Part II hereof and
Notes issued in definitive form will be issued in accordance with the
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procedures set forth in Part III hereof. Capitalized terms used herein that
are not otherwise defined shall have the meanings ascribed thereto in the
Indenture or the Notes, as the case may be.
PART I: PROCEDURES OF GENERAL APPLICABILITY
Date of Issuance/
Authentication: Each Note will be dated as of the date of its
authentication by the Trustee. Each Note shall
also bear an original issue date (each, an
"Original Issue Date"). The Original Issue Date
shall remain the same for all Notes subsequently
issued upon transfer, exchange or substitution of
an original Note regardless of their dates of
authentication.
Maturities: Each Note will mature on a date no less than nine
months and no more than 30 years from its Original
Issue Date (the "Stated Maturity Date") selected
by the investor or other purchaser and agreed to
by the Company.
Registration: Unless otherwise provided in the applicable
Pricing Supplement, Notes will be issued only in
fully registered form.
Denominations: Unless otherwise provided in the applicable
Pricing Supplement, the Notes will be issued in
denominations of $1,000 and integral multiples
thereof.
Interest Rate Bases
applicable to Floating
Rate Notes: Unless otherwise provided in the applicable
Pricing Supplement, Floating Rate Notes will bear
interest at a rate or rates determined by
reference to the Commercial Paper Rate, the
Federal Funds Rate, LIBOR, the Prime Rate, the
Treasury Rate, or such other interest rate basis
or formula as may be set forth in the applicable
Pricing Supplement, or by reference to two or more
such rates, as adjusted by the Spread and/or
Spread Multiplier, if any, applicable to such
Floating Rate Notes.
Redemption/Repayment: The Notes may be subject to redemption, in whole
or in part, prior to their stated maturity by the
Company in accordance with the terms of the Notes,
which will be fixed at the time of sale and set
forth in the applicable Pricing Supplement. If no
Initial Redemption Date is indicated with respect
to a Note, such Note will not be redeemable prior
to its Stated Maturity Date.
The Notes will be subject to repayment at the
option of the Holders thereof in accordance with
the terms of the Notes, which will be fixed at the
time of sale and set forth in the applicable
Pricing Supplement. If no Optional Repayment Date
is indicated
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with respect to a Note, such Note will not be
repayable at the option of the Holder prior to its
Stated Maturity Date.
Calculation of Interest: In case of Fixed Rate Notes, interest (including
payments for partial periods) will be calculated
and paid on the basis of a 360-day year of twelve
30-day months.
The interest rate on each Floating Rate Note
will be calculated by reference to the
specified Interest Rate Basis or Bases plus or
minus the applicable Spread, if any, and/or
multiplied by the applicable Spread Multiplier,
if any.
Unless otherwise provided in the applicable
Pricing Supplement, accrued interest on each
Floating Rate Note will be calculated by
multiplying its face amount by an accrued
interest factor. Such accrued interest factor
is computed by adding the interest factor
calculated for each day from the later of the
date of issue, or from the last date to which
interest has been paid or duly provided for, to
the date for which accrued interest is being
calculated. Unless otherwise provided in the
applicable Pricing Supplement, the interest
factor for each such day is computed by
dividing the interest rate applicable to such
day by 360 if the Commercial Paper Rate, the
Federal Funds Rate, LIBOR or Prime Rate is an
applicable Interest Rate Basis, or by the
actual number of days in the year if the
Treasury Rate is an applicable Interest Rate
Basis. Unless otherwise provided in the
applicable Pricing Supplement, the interest
factor for Notes for which the interest rate is
calculated with reference to two or more
Interest Rate Bases will be calculated in each
period in the same manner as if only the lowest
of the applicable Interest Rate Bases applied.
Interest: GENERAL. Each Note will bear interest in
accordance with its terms. Unless otherwise
provided in the applicable Pricing Supplement,
interest on each Note will accrue from and
including the Original Issue Date of such Note for
the first interest period or from the most recent
Interest Payment Date (as defined below) to which
interest has been paid or duly provided for all
subsequent interest periods to but excluding the
applicable Interest Payment Date or the Stated
Maturity Date or date of earlier redemption or
repayment, as the case may be (the Stated Maturity
Date or date of earlier redemption or repayment is
referred to herein as the "Maturity Date" with
respect to the principal repayable on such date).
If an Interest Payment Date or the Maturity Date
with respect to any Fixed Rate Note falls on a day
that is not a Business Day (as
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defined below), the required payment to be made on
such day need not be made on such day, but may be
made on the next succeeding Business Day with the
same force and effect as if made on such day, and
no interest shall accrue on such payment for the
period from and after such day to the next
succeeding Business Day. If an Interest Payment
Date other than the Maturity Date with respect to
any Floating Rate Note would otherwise fall on a
day that is not a Business Day, such Interest
Payment Date will be postponed to the next
succeeding Business Day, except that in the case
of a Note for which LIBOR is an applicable
Interest Rate Basis, if such Business Day falls in
the next succeeding calendar month, such Interest
Payment Date will be the immediately preceding
Business Day. If the Maturity Date with respect to
any Floating Rate Note falls on a day that is not
a Business Day, the required payment to be made on
such day need not be made on such day, but may be
made on the next succeeding Business Day, except
that in the case of a Note for which LIBOR is an
applicable Interest Rate Basis, if such Business
Day falls in the next succeeding calendar month,
the immediately preceding Business Day, with the
same force and effect as if made on such day, and
no interest shall accrue on such payment for the
period from and after the Maturity Date to the
next succeeding Business Day. Unless otherwise
provided in the applicable Pricing Supplement,
"Business Day" means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day
on which banking institutions at the Place of
Payment (as defined below) are authorized or
obligated by law or executive order to close, and
with respect to Notes for which LIBOR is an
applicable Interest Rate Basis, such day is also a
London Business Day (as defined below). "Place of
Payment" means the place or places where the
principal of (and premium, if any) and interest
on, or any Additional Amounts with respect to, the
Notes are payable. "London Business Day" means,
unless otherwise specified in the applicable
Pricing Supplement, any day on which dealings in
deposits in United States dollars are transacted
in the London interbank market.
REGULAR RECORD DATES. Unless otherwise provided in
the applicable Pricing Supplement, the "Regular
Record Date" for a Fixed Rate Note will be the
March 15 and September 15 (whether or not a
Business Day) preceding the applicable Interest
Payment Date and, for a Floating Rate Note, shall
be shall be the date 15 calendar days (whether
or not a Business Day) preceding the applicable
Interest Payment Date.
INTEREST PAYMENT DATES. Interest payments will be
made on each Interest Payment Date commencing with
the first Interest
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Payment Date following the Original Issue Date;
provided, however, the first payment of interest
on any Note originally issued between a Regular
Record Date and an Interest Payment Date will
occur on the Interest Payment Date following the
next succeeding Regular Record Date.
Unless otherwise provided in the applicable
Pricing Supplement, interest payments on Fixed
Rate Notes will be made semiannually in arrears on
April 1st and October 1st of each year and on
the Maturity Date, while interest payments on
Floating Rate Notes will be made as specified in
the applicable Pricing Supplement.
Acceptance and Rejection of
Offers from Solicitation: If agreed upon by any Agent and the Company, then
such Agent acting solely as agent for the Company
and not as principal will solicit purchases of the
Notes. Each Agent will communicate to the Company,
orally or in writing, each reasonable offer to
purchase Notes solicited by such Agent on an
agency basis, other than those offers rejected by
such Agent. Each Agent has the right, in its
discretion reasonably exercised, to reject any
proposed purchase of Notes, as a whole or in part,
and any such rejection shall not be a breach of
such Agent's agreement contained in the
Distribution Agreement. The Company has the sole
right to accept or reject any proposed purchase of
Notes, in whole or in part, and any such rejection
shall not be a breach of the Company's agreement
contained in the Distribution Agreement. Each
Agent has agreed to make reasonable efforts to
assist the Company in obtaining performance by
each purchaser whose offer to purchase Notes has
been solicited by such Agent and accepted by the
Company.
Preparation of Pricing
Supplement: If any offer to purchase a Note is accepted by the
Company, the Company will promptly prepare a
Pricing Supplement reflecting the terms of such
Note and file such Pricing Supplement with the
Commission in accordance with Rule 424 under the
Securities Act of 1933, as amended (the "Act").
Information to be included in the Pricing
Supplement shall include:
1. the name of the Company;
2. the title of the Notes;
3. the date of the Pricing Supplement and the
date of the Prospectus to which the
Pricing Supplement relates;
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4. the name of the Offering Agent (as defined
below);
5. whether such Notes are being sold to the
Offering Agent as principal or to an investor
or other purchaser through the Offering Agent
acting as agent for the Company;
6. with respect to Notes sold to the Offering
Agent as principal, whether such Notes will
be resold by the Offering Agent to investors
and other purchasers at (i) a fixed public
offering price of a specified percentage of
their principal amount or (ii) at varying
prices related to prevailing market prices at
the time of resale to be determined by the
Offering Agent;
7. with respect to Notes sold to an investor or
other purchaser through the Offering Agent
acting as agent for the Company, whether such
Notes will be sold at (i) 100% of their
principal amount or (ii) a specified
percentage of their principal amount;
8. the Offering Agent's discount or commission;
9. net proceeds to the Company;
10. the Principal Amount, Original Issue Date,
Stated Maturity Date, Interest Payment
Date(s), Redemption Commencement Date, if
any, Initial Redemption Percentage, if any,
Annual Redemption Percentage, if any,
Optional Repayment Date(s), if any, Default
Rate, if any, and, in the case of Fixed Rate
Notes, the Interest Rate, and whether such
Fixed Rate Note is an Original Issue Discount
Note (and, if so, the Issue Price), and, in
the case of Floating Rate Notes, the Interest
Rate Basis or Bases, Index Maturity (if
applicable), Initial Interest Rate, if any,
Maximum Interest Rate, if any, Minimum
Interest Rate, if any, Initial Interest Reset
Date, Interest Reset Dates, Spread and/or
Spread Multiplier, if any, and Calculation
Agent (if other than the Trustee); and
11. any other additional provisions of the Notes
material to investors or other purchasers of
the Notes not otherwise specified in the
Prospectus.
The Company shall use its reasonable best efforts
to send such Pricing Supplement by telecopy or
overnight express (for delivery by the close of
business on the applicable trade date, but in no
event later than 11:00 a.m. New York City time, on
the Business Day following the applicable trade
date) to the Agent
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which made or presented the offer to purchase the
applicable Note (in such capacity, the "Offering
Agent") and the Trustee at the following
applicable address: if to Merrill Lynch & Co., to:
Merrill Lynch Production Technologies, 44B
Colonial Drive, Piscataway, New Jersey 08854,
Attention: Prospectus Operations/Nachman
Kimerling, (732) 885-2768, telecopier: (732)
885-2774/5/6, email: mtnsuppl@na2.us.ml.com; if to
Banc One Capital Markets, Inc., to: Banc One
Capital Markets, Inc., One Banc Plaza, Chicago, IL
60670, Attention: Investment Grade Securities,
telecopier: (312) 275-3490; if to U.S. Bancorp
Piper Jaffray Inc., to: U.S. Bancorp Piper Jaffray
Inc., U.S. Bancorp Tower, 111 S.W. Fifth Avenue,
Suite 1900, Portland, OR 97204, Attention: Michael
Malmquist, telecopier: (503) 275-3490; and if to
the Trustee, to: Wells Fargo Bank Northwest,
National Association (formerly known as First
Security Bank, N.A.), Attention: Corporate Trust
Department, 79 South Main Street, Salt Lake City,
Utah 84111, telecopier: (801) 246-5053.
For record keeping purposes, one copy of such
Pricing Supplement shall also be mailed or
telecopied to Merrill Lynch, Pierce, Fenner &
Smith Incorporated, 4 World Financial Center, 15th
Floor, New York, New York, 10080, Attention: MTN
Product Management, (212) 449-7476, telecopier:
(212) 449-2234, with a copy to Sidley Austin Brown
& Wood LLP, 555 California Street, San Francisco,
California 94104, Attention: Paul C. Pringle, Esq.
In each instance that a Pricing Supplement is
prepared, the Offering Agent will provide a copy
of such Pricing Supplement to each investor or
purchaser of the relevant Notes or its agent.
Settlement: The receipt of immediately available funds by the
Company in payment for a Note and the
authentication and delivery of such Note shall,
with respect to such Note, constitute
"settlement". Offers accepted by the Company will
be settled in three Business Days, or at such time
as the purchaser, the applicable Agent and the
Company shall agree, pursuant to the timetable for
settlement set forth in Parts II and III hereof
under "Settlement Procedure Timetable" with
respect to Global Notes and Certificated Notes,
respectively (each such date fixed for settlement
is hereinafter referred to as a "Settlement
Date"). If procedures A and B of the applicable
Settlement Procedures with respect to a particular
offer are not completed on or before the time set
forth under the applicable "Settlement Procedures
Timetable", such offer shall not be settled until
the Business Day following the completion of
settlement procedures A and B or such later date
as the purchaser
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and the Company shall agree.
The foregoing settlement procedures may be
modified with respect to any purchase of Notes
by an Agent as principal if so agreed by the
Company and such Agent.
Procedure for Changing
Rates or Other: When a decision has been reached to change the
interest rate or any other variable term on any
Notes being sold by the Company, the Company will
promptly advise the Agents and the Trustee by
facsimile transmission and the Agents will
forthwith suspend solicitation of offers to
purchase such Notes. The Agents will telephone the
Company with recommendations as to the changed
interest rates or other variable terms. At such
time as the Company notifies the Agents and the
Trustee of the new interest rates or other
variable terms, the Agents may resume solicitation
of offers to purchase such Notes. Until such time,
only "indications of interest" may be recorded.
Immediately after acceptance by the Company of an
offer to purchase Notes at a new interest rate or
new variable term, the Company, the Offering Agent
and the Trustee shall follow the procedures set
forth under the applicable "Settlement
Procedures".
Suspension of Solicitation;
Amendment or Supplement: The Company may instruct the Agents to suspend
solicitation of offers to purchase Notes at any
time. Upon receipt of such instructions, the
Agents will forthwith suspend solicitation of
offers to purchase from the Company until such
time as the Company has advised the Agents that
solicitation of offers to purchase may be resumed.
If the Company decides to amend or supplement the
Registration Statement or the Prospectus (other
than to establish or change interest rates or
formulas, maturities, prices or other similar
variable terms with respect to the Notes), it will
promptly advise the Agents and will furnish the
Agents and their counsel with copies of the
proposed amendment or supplement. Copies of such
amendment or supplement will be delivered or
mailed to the Agents, their counsel and the
Trustee in quantities which such parties may
reasonably request at the following respective
addresses: Merrill Lynch & Co., 4 World Financial
Center, 15th Floor, New York, New York 10080,
Attention: MTN Product Management, (212) 449-7476,
telecopier: (212) 449-2234; if to Banc One Capital
Markets, Inc., to: Banc One Capital Markets, Inc.,
1 Bank One Plaza, Chicago, IL 60670, Attention:
Investment Grade Securities, telecopier: (312)
732-4773; if to U.S. Bancorp Piper Jaffray Inc.,
to: U.S. Bancorp Piper Jaffray Inc., U.S. Bancorp
Tower, 111
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S.W. Fifth Avenue, Suite 1900, Portland, Oregon
97204, Attention: Michael Malmquist, telecopier
(503) 275-3490; and if to the Trustee, to: Wells
Fargo Bank Northwest, National Association
(formerly known as First Security Bank, N.A.),
Attention: Corporate Trust Department, 79 South
Main Street, Salt Lake City, Utah 84111,
telecopier: (801) 246-5053. For record keeping
purposes, one copy of each such amendment or
supplement shall also be mailed or telecopied to
Sidley Austin Brown & Wood LLP, 555 California
Street, San Francisco, California 94104,
Attention: Paul C. Pringle, Esq., (415) 772-1200,
telecopier: (415) 397-4621.
In the event that at the time the solicitation of
offers to purchase from the Company is suspended
(other than to establish or change interest rates
or formulas, maturities, prices or other similar
variable terms with respect to the Notes) there
shall be any offers to purchase Notes that have
been accepted by the Company which have not been
settled, the Company will promptly advise the
Offering Agent and the Trustee whether such offers
may be settled and whether copies of the
Prospectus as theretofore amended and/or
supplemented as in effect at the time of the
suspension may be delivered in connection with the
settlement of such offers. The Company will have
the sole responsibility for such decision and for
any arrangements which may be made in the event
that the Company determines that such offers may
not be settled or that copies of such Prospectus
may not be so delivered.
Delivery of Prospectus and
applicable Pricing
Supplement: A copy of the most recent Prospectus and the
applicable Pricing Supplement must accompany or
precede the earlier of (a) the written
confirmation of a sale sent to an investor or
other purchaser or its agent and (b) the delivery
of Notes to an investor or other purchaser or its
agent.
Authenticity of Signatures: The Agents will have no obligation or liability to
the Company or the Trustee in respect of the
authenticity of the signature of any officer,
employee or agent of the Company or the Trustee on
any Note.
Documents Incorporated by
Reference: The Company shall supply the Agents with an
adequate supply of all documents incorporated by
reference in the Registration Statement and the
Prospectus.
Taxes: Under the Indenture, Notes may be issued at a
discount from the
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stated principal amount thereof or with such terms
(such as contingent interest, interest holidays,
irregular accrual periods, interest payable in
additional Notes, stepped rates, rates based on
multiple or non-conventional interest indices or
Notes on which payments are tied to the value of a
single stock, a basket of stocks, a commodity or a
stock or commodities index) so as to cause the
Notes to be subject to the original issue discount
rules of federal, state, local or foreign tax
laws. In the event Notes are issued at such
discount or with such terms so as to cause
original issue discount rules to apply, the terms
of such Notes and additional disclosure regarding
the federal income tax treatment of such Notes as
well as certain other considerations will be
provided in the applicable Pricing Supplement
relating thereto.
PART II: PROCEDURES FOR NOTES ISSUED
IN BOOK-ENTRY FORM
In connection with the qualification of Notes issued in
book-entry form for eligibility in the book-entry system maintained by
DTC, the Trustee will perform the custodial, document control and
administrative functions described below, in accordance with its
respective obligations under a Letter of Representations from the
Company and the Trustee to DTC, dated _________ ___, 2001, and the
Medium-Term Note Certificate Agreement, dated ____________, between
the Trustee and DTC, as amended on ____________, and as such agreement
may be further amended from time to time (the "Certificate
Agreement"), and its obligations as a participant in DTC, including
DTC's Same-Day Funds Settlement System ("SDFS").
Issuance: All Fixed Rate Notes issued in book-entry form
having the same Original Issue Date, Specified
Currency, Interest Rate, Default Rate, Interest
Payment Dates, redemption and/or repayment terms,
if any, and Stated Maturity Date (collectively,
the "Fixed Rate Terms") will be represented
initially by a single Global Note; and all
Floating Rate Notes issued in book-entry form
having the same Original Issue Date, Specified
Currency, Interest Category, formula for the
calculation of interest (including the Interest
Rate Basis or Bases, which may be the Commercial
Paper Rate, the Federal Funds Rate, LIBOR, the
Prime Rate or the Treasury Rate or any other
interest rate basis or formula, and Spread and/or
Spread Multiplier, if any), Initial Interest Rate,
Default Rate (if applicable), Index Maturity (if
applicable), Minimum Interest Rate, if any,
Maximum Interest Rate, if any, redemption and/or
repayment terms, if any, Interest Payment Dates,
Initial Interest Reset Date, Interest Reset Dates
and Stated Maturity Date (collectively, the
"Floating Rate Terms") will be represented
initially by a single Global Note.
For other variable terms with respect to the Fixed
Rate Notes
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and Floating Rate Notes, see the Prospectus and
the applicable Pricing Supplement.
Owners of beneficial interests in Global Notes
will be entitled to physical delivery of
Certificated Notes equal in principal amount to
their respective beneficial interests only upon
certain limited circumstances described in the
Prospectus.
Identification: The Company has arranged with the CUSIP Service
Bureau of Standard & Poor's Corporation (the
"CUSIP Service Bureau") for the reservation of one
series of CUSIP numbers, which series consists of
approximately 900 CUSIP numbers which have been
reserved for and relating to Global Notes and the
Company has delivered to each of the Trustee and
DTC such list of such CUSIP numbers. The Company
will assign CUSIP numbers to Global Notes as
described below under Settlement Procedure B. DTC
will notify the CUSIP Service Bureau periodically
of the CUSIP numbers that the Company has assigned
to Global Notes. The Trustee will notify the
Company at any time when fewer than 100 of the
reserved CUSIP numbers remain unassigned to Global
Notes, and, if it deems necessary, the Company
will reserve and obtain additional CUSIP numbers
for assignment to Global Notes. Upon obtaining
such additional CUSIP numbers, the Company will
deliver a list of such additional numbers to the
Trustee and DTC.
Registration: Unless otherwise specified by DTC, each Global
Note will be registered in the name of Cede & Co.,
as nominee for DTC, on the register maintained by
the Trustee under the Indenture. The beneficial
owner of a Note issued in book-entry form (I.E.,
an owner of a beneficial interest in a Global
Note) (or one or more indirect participants in DTC
designated by such owner) will designate one or
more participants in DTC (with respect to such
Note issued in book-entry form, the
"Participants") to act as agent for such
beneficial owner in connection with the book-entry
system maintained by DTC, and DTC will record in
book-entry form, in accordance with instructions
provided by such Participants, a credit balance
with respect to such Note issued in book-entry
form in the account of such Participants. The
ownership interest of such beneficial owner in
such Note issued in book-entry form will be
recorded through the records of such Participants
or through the separate records of such
Participants and one or more indirect participants
in DTC.
Transfers: Transfers of beneficial ownership interests in a
Global Note will be accomplished by book entries
made by DTC and, in turn, by Participants (and in
certain cases, one or more indirect
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participants in DTC) acting on behalf of
beneficial transferors and transferees of such
Global Note.
Exchanges: The Trustee may deliver to DTC and the CUSIP
Service Bureau at any time a written notice
specifying (a) the CUSIP numbers of two or more
Global Notes outstanding on such date that
represent Global Notes having the same Fixed Rate
Terms or Floating Rate Terms, as the case may be
(other than Original Issue Dates), and for which
interest has been paid to the same date; (b) a
date, occurring at least 30 days after such
written notice is delivered and at least 30 days
before the next Interest Payment Date for the
related Notes issued in book-entry form, on which
such Global Notes shall be exchanged for a single
replacement Global Note; and (c) a new CUSIP
number, obtained from the Company, to be assigned
to such replacement Global Note. Upon receipt of
such a notice, DTC will send to its Participants
(including the Trustee) a written reorganization
notice to the effect that such exchange will occur
on such date. Prior to the specified exchange
date, the Trustee will deliver to the CUSIP
Service Bureau written notice setting forth such
exchange date and the new CUSIP number and stating
that, as of such exchange date, the CUSIP numbers
of the Global Notes to be exchanged will no longer
be valid. On the specified exchange date, the
Trustee will exchange such Global Notes for a
single Global Note bearing the new CUSIP number
and the CUSIP numbers of the exchanged Notes will,
in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately
reassigned.
Denominations: Unless otherwise provided in the applicable
Pricing Supplement, Notes issued in book-entry
form will be issued in denominations of $1,000 and
integral multiples thereof. Global Notes will not
be denominated in excess of $500,000,000 aggregate
principal amount. If one or more Notes are issued
in book-entry form in excess of $500,000,000
aggregate principal amount and would, but for the
preceding sentence, be represented by a single
Global Note, then one Global Note will be issued
to represent each $500,000,000 in aggregate
principal amount of such Notes issued in
book-entry form and an additional Global Note or
Notes will be issued to represent any remaining
aggregate principal amount of such Note or Notes
issued in book-entry form. In such a case, each of
the Global Notes representing Notes issued in
book-entry form shall be assigned the same CUSIP
number.
Payments of Principal and
Interest: PAYMENTS OF INTEREST ONLY. Promptly after each
Regular Record
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Date, the Trustee will deliver to the Company and
DTC a written notice specifying by CUSIP number
the amount of interest to be paid on each Global
Note on the following Interest Payment Date (other
than an Interest Payment Date coinciding with the
Maturity Date) and the total of such amounts. DTC
will confirm the amount payable on each Global
Note on such Interest Payment Date by reference to
the daily bond reports published by Standard &
Poor's Corporation. On such Interest Payment Date,
the Company will pay to the Trustee in immediately
available funds an amount sufficient to pay the
interest then due and owing on the Global Notes,
and upon receipt of such funds from the Company,
the Trustee in turn will pay to DTC such total
amount of interest due on such Global Notes (other
than on the Maturity Date) which is payable in
U.S. dollars, at the times and in the manner set
forth below under "Manner of Payment". The Trustee
shall make payment of that amount of interest due
and owing on any Global Notes that Participants
have elected to receive in foreign or composite
currencies directly to such Participants.
NOTICE OF INTEREST RATES. Promptly after each
Interest Determination Date or Calculation Date,
as the case may be, for Floating Rate Notes issued
in book-entry form, the Trustee will notify each
of Moody's Investors Service, Inc. and Standard &
Poor's Corporation of the interest rates
determined as of such Interest Determination Date.
PAYMENTS AT MATURITY. On or about the first
Business Day of each month, the Trustee will
deliver to the Company and DTC a written list of
principal, premium, if any, and interest to be
paid on each Global Note maturing or otherwise
becoming due in the following month. The Trustee,
the Company and DTC will confirm the amounts of
such principal, premium, if any, and interest
payments with respect to each such Global Note on
or about the fifth Business Day preceding the
Maturity Date of such Global Note. On the Maturity
Date, the Company will pay to the Trustee in
immediately available funds an amount sufficient
to make the required payments, and upon receipt of
such funds the Trustee in turn will pay to DTC the
principal amount of Global Notes, together with
premium, if any, and interest due on the Maturity
Date, which are payable in U.S. dollars, at the
times and in the manner set forth below under
"Manner of Payment". The Trustee shall make
payment of the principal, premium, if any, and
interest to be paid on the Maturity Date of each
Global Note that Participants have elected to
receive in foreign or composite currencies
directly to such Participants. Promptly after (i)
payment to DTC of the principal,
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premium, if any, and interest due on the Maturity
Date of such Global Note which are payable in U.S.
dollars and (ii) payment of the principal,
premium, if any, and interest due on the Maturity
Date of such Global Note to those Participants who
have elected to receive such payments in foreign
or composite currencies, the Trustee will cancel
such Global Note and deliver it to the Company
with an appropriate debit advice. On the first
Business Day of each month, the Trustee will
deliver to the Company a written statement
indicating the total principal amount of
outstanding Global Notes as of the close of
business on the immediately preceding Business
Day.
MANNER OF PAYMENT. The total amount of any
principal, premium, if any, and interest due on
Global Notes on any Interest Payment Date or the
Maturity Date, as the case may be, which is
payable in U.S. dollars shall be paid by the
Company to the Trustee in funds available for use
by the Trustee no later than 12:00 noon, New York
City time, on such date. The Company will make
such payment on such Global Notes to an account
specified by the Trustee. Upon receipt of such
funds, the Trustee will pay by separate wire
transfer (using Fedwire message entry instructions
in a form previously specified by DTC) to an
account at the Federal Reserve Bank of New York
previously specified by DTC, in funds available
for immediate use by DTC, each payment in U.S.
dollars of principal, premium, if any, and
interest due on Global Notes on such date.
Thereafter on such date, DTC will pay, in
accordance with its SDFS operating procedures then
in effect, such amounts in funds available for
immediate use to the respective Participants in
whose names the beneficial interests in such
Global Notes are recorded in the book-entry system
maintained by DTC. Neither the Company nor the
Trustee shall have any responsibility or liability
for the payment in U.S. dollars by DTC of the
principal of, or premium, if any, or interest on,
the Global Notes. The Trustee shall make all
payments of principal, premium, if any, and
interest on each Global Note that Participants
have elected to receive in foreign or composite
currencies directly to such Participants.
WITHHOLDING TAXES. The amount of any taxes
required under applicable law to be withheld from
any interest payment on a Global Note will be
determined and withheld by the Participant,
indirect participant in DTC or other Person
responsible for forwarding payments and materials
directly to the beneficial owner of such Global
Note.
Settlement Procedures: Settlement Procedures with regard to each Note in
book-entry
14
<Page>
form sold by an Agent, as agent of the Company, or
purchased by an Agent, as principal, will be as
follows:
A. The Offering Agent will advise the Company by
telephone, confirmed by facsimile, of the
following settlement information:
1. Principal Amount, Authorized
Denomination, and Specified Currency.
2. Exchange Rate Agent, if any.
3. (a) Fixed Rate Notes:
(i) Interest Rate.
(ii) Interest Payment Dates.
(iii) Whether such Note is being
issued with Original Issue
Discount and, if so, the
terms thereof.
(b) Floating Rate Notes:
(i) Interest Category.
(ii) Interest Rate Basis or
Bases.
(iii) Initial Interest Rate.
(iv) Spread and/or Spread
Multiplier, if any.
(v) Initial Interest Reset Date
or Interest Reset Dates.
(vi) Interest Payment Dates.
(vii) Index Maturity, if any.
(viii) Maximum and/or Minimum
Interest Rates, if any.
(ix) Calculation Agent (if other
than the Trustee).
4. Price to public, if any, of such Note
(or whether such Note is being offered
at varying prices relating to prevailing
market prices at time of
15
<Page>
resale as determined by the Offering
Agent).
5. Trade Date.
6. Settlement Date (Original Issue Date).
7. Stated Maturity Date.
8. Redemption provisions, if any.
9. Repayment provisions, if any.
10. Default Rate, if any.
11. Net proceeds to the Company.
12. The Offering Agent's discount or
commission.
13. Whether such Note is being sold to the
Offering Agent as principal or to an
investor or other purchaser through the
Offering Agent acting as agent for the
Company.
14. Such other information specified with
respect to such Note (whether by
Addendum or otherwise).
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<Page>
B. The Company will assign a CUSIP number to the
Global Note representing such Note and then
advise the Trustee by facsimile transmission
or other electronic transmission of the above
settlement information received from the
Offering Agent, such CUSIP number and the
name of the Offering Agent. The Company will
also advise the Offering Agent of the CUSIP
number assigned to the Global Note.
C. The Trustee will communicate to DTC and the
Offering Agent through DTC's Participant
Terminal System a pending deposit message
specifying the following settlement
information:
1. The information set forth in the
Settlement Procedure A.
2. Identification numbers of the
participant accounts maintained by DTC
on behalf of the Trustee and the
Offering Agent.
3. Identification of the Global Note as a
Fixed Rate Global Note or Floating Rate
Global Note.
4. Initial Interest Payment Date for such
Note, number of days by which such date
succeeds the related record date for DTC
purposes (or, in the case of Floating
Rate Notes which reset daily or weekly,
the date five calendar days preceding
the Interest Payment Date) and, if then
calculable, the amount of interest
payable on such Interest Payment Date
(which amount shall have been confirmed
by the Trustee).
5. CUSIP number of the Global Note
representing such Note.
6. Whether such Global Note represents any
other Notes issued or to be issued in
book-entry form.
DTC will arrange for each pending deposit
message described above to be transmitted to
Standard & Poor's Corporation, which will use
the information in the message to include
certain terms of the related Global Note in
the appropriate daily bond report published
by Standard & Poor's Corporation.
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<Page>
D. The Trustee will complete and authenticate
the Global Note representing such Note.
E. DTC will credit such Note to the participant
account of the Trustee maintained by DTC.
F. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to the
Trustee's participant account and credit such
Note to the participant account of the
Offering Agent maintained by DTC and (ii) to
debit the settlement account of the Offering
Agent and credit the settlement account of
the Trustee maintained by DTC, in an amount
equal to the price of such Note less such
Offering Agent's discount or underwriting
commission, as applicable. Any entry of such
a deliver order shall be deemed to constitute
a representation and warranty by the Trustee
to DTC that (i) the Global Note representing
such Note has been issued and authenticated
and (ii) the Trustee is holding such Global
Note pursuant to the Certificate Agreement.
G. In the case of Notes in book-entry form sold
through the Offering Agent, as agent, the
Offering Agent will enter an SDFS deliver
order through DTC's Participant Terminal
System instructing DTC (i) to debit such Note
to the Offering Agent's participant account
and credit such Note to the participant
account of the Participants maintained by DTC
and (ii) to debit the settlement accounts of
such Participants and credit the settlement
account of the Offering Agent maintained by
DTC in an amount equal to the initial public
offering price of such Note.
H. Transfers of funds in accordance with SDFS
deliver orders described in Settlement
Procedures F and G will be settled in
accordance with SDFS operating procedures in
effect on the Settlement Date.
I. Upon receipt, the Trustee will pay the
Company, by wire transfer of immediately
available funds to an account specified by
the Company to the Trustee from time to time,
the amount transferred to the Trustee in
accordance with Settlement Procedure F.
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<Page>
J. The Trustee will send a copy of the Global
Note by first class mail to the Company
together with a statement setting forth the
principal amount of Notes Outstanding as of
the related Settlement Date after giving
effect to such transaction and all other
offers to purchase Notes of which the Company
has advised the Trustee but which have not
yet been settled.
K. If such Note was sold through the Offering
Agent, as agent, the Offering Agent will
confirm the purchase of such Note to the
investor or other purchaser either by
transmitting to the Participant with respect
to such Note a confirmation order through
DTC's Participant Terminal System or by
mailing a written confirmation to such
investor or other purchaser.
Settlement Procedures
Timetable: For offers to purchase Notes accepted by the
Company, Settlement Procedures A through K set
forth above shall be completed as soon as possible
following the trade but not later than the
respective times (New York City time) set forth
below:
<Table>
<Caption>
SETTLEMENT
PROCEDURE TIME
---------- ----
A 11:00 a.m. on the trade date or
within one hour following the trade
B 12:00 noon on the trade date or
within one hour following the trade
C No later than the close of business
on the trade date
D 11:00 a.m. on Settlement Date
E 10:00 a.m. on Settlement Date
F-G No later than 2:00 p.m. on
Settlement Date
H 4:00 p.m. on Settlement Date
I-K 5:00 p.m. on Settlement Date
</Table>
Settlement Procedure H is subject to extension in
accordance with any extension of Fedwire closing
deadlines and in the other events specified in the
SDFS operating procedures in effect on
19
<Page>
the Settlement Date.
If settlement of a Note issued in book-entry form
is rescheduled or canceled, the Trustee will
deliver to DTC, through DTC's Participant Terminal
System, a cancellation message to such effect by
no later than 5:00 p.m., New York City time, on
the Business Day immediately preceding the
scheduled Settlement Date.
Failure to Settle: If the Trustee fails to enter an SDFS deliver
order with respect to a Note issued in book-entry
form pursuant to Settlement Procedure F, the
Trustee may deliver to DTC, through DTC's
Participant Terminal System, as soon as
practicable a withdrawal message instructing DTC
to debit such Note to the participant account of
the Trustee maintained at DTC. DTC will process
the withdrawal message, provided that such
participant account contains a principal amount of
the Global Note representing such Note that is at
least equal to the principal amount to be debited.
If withdrawal messages are processed with respect
to all the Notes represented by a Global Note, the
Trustee will mark such Global Note "canceled",
make appropriate entries in its records and send
certification of destruction of such canceled
Global Note to the Company. The CUSIP number
assigned to such Global Note shall, in accordance
with CUSIP Service Bureau procedures, be canceled
and not immediately reassigned. If withdrawal
messages are processed with respect to a portion
of the Notes represented by a Global Note, the
Trustee will exchange such Global Note for two
Global Notes, one of which shall represent the
Global Notes for which withdrawal messages are
processed and shall be canceled immediately after
issuance and the other of which shall represent
the other Notes previously represented by the
surrendered Global Note and shall bear the CUSIP
number of the surrendered Global Note.
In the case of any Note in book-entry form sold
through the Offering Agent, as agent, if the
purchase price for any such Note is not timely
paid to the Participants with respect thereto by
the beneficial investor or other purchaser thereof
(or a person, including an indirect participant in
DTC, acting on behalf of such investor or other
purchaser), such Participants and, in turn, the
related Offering Agent may enter SDFS deliver
orders through DTC's Participant Terminal System
reversing the orders entered pursuant to
Settlement Procedures F and G, respectively.
Thereafter, the Trustee will deliver the
withdrawal message and take the related actions
described in the preceding paragraph. If such
failure shall have occurred for any reason other
than default by the applicable Offering Agent to
perform its obligations
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<Page>
hereunder or under the Distribution Agreement, the
Company will reimburse such Offering Agent on an
equitable basis for its reasonable loss of the use
of funds during the period when the funds were
credited to the account of the Company.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Note in book-entry form,
DTC may take any actions in accordance with its
SDFS operating procedures then in effect. In the
event of a failure to settle with respect to a
Note that was to have been represented by a Global
Note also representing other Notes, the Trustee
will provide, in accordance with Settlement
Procedure D, for the authentication and issuance
of a Global Note representing such remaining Notes
and will make appropriate entries in its records.
PART III: PROCEDURES FOR CERTIFICATED NOTES
Denominations: Unless otherwise provided in the applicable
Pricing Supplement, the Certificated Notes will be
issued in denominations of $1,000 and integral
multiples thereof.
Payments of Principal,
Premium, if any, and
Interest: Upon presentment and delivery of the Certificated
Note, the Trustee upon receipt of immediately
available funds from the Company will pay the
principal of, premium, if any, and interest on,
each Certificated Note on the Maturity Date in
immediately available funds. All interest payments
on a Certificated Note, other than interest due on
the Maturity Date, will be made by check mailed to
the address of the person entitled thereto as such
address shall appear in the Security Register;
PROVIDED, HOWEVER, that Holders of $10,000,000 or
more in aggregate principal amount of Certificated
Notes having the same Interest Payment Date shall
be entitled to receive upon written request
received by the Trustee prior to the Regular
Record Date in respect of an interest payment, or
the date which is 15 days before the Stated
Maturity or date of redemption or repayment of the
principal of the Notes, as the case may be, such
interest payments by wire transfer of immediately
available funds if appropriate wire transfer
instructions have been received in writing by the
Trustee not less than 15 calendar days prior to
the applicable Interest Payment Date.
The Trustee will provide monthly to the Company a
list of the principal, premium, if any, and
interest to be paid on Certificated Notes maturing
in the next succeeding month. The Trustee will be
responsible for withholding taxes on interest paid
as required
21
<Page>
by applicable law.
Certificated Notes presented to the Trustee on the
Maturity Date for payment will be canceled by the
Trustee. All canceled Certificated Notes held by
the Trustee shall be destroyed, and the Trustee
shall furnish to the Company a certificate with
respect to such destruction.
Settlement Procedures: Settlement Procedures with regard to each
Certificated Note purchased by an Agent, as
principal, or through an Agent, as agent, shall be
as follows:
A. The Offering Agent will advise the Company by
telephone of the following Settlement
information with regard to each Certificated
Note:
1. Exact name in which the Certificated
Note(s) is to be registered (the
"Registered Owner").
2. Exact address or addresses of the
Registered Owner for delivery, notices
and payments of principal, premium, if
any, and interest.
3. Taxpayer identification number of the
Registered Owner.
4. Principal amount, Authorized
Denomination and Specified Currency.
5. Exchange Rate Agent, if any.
6. (a) Fixed Rate Notes:
(i) Interest Rate.
(ii) Interest Payment Dates.
(iii) Whether such Note is being
issued with Original Issue
Discount and, if so, the
terms thereof.
(b) Floating Rate Notes:
(i) Interest Category.
(ii) Interest Rate Basis or Bases.
(iii) Initial Interest Rate.
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<Page>
(iv) Spread and/or Spread
Multiplier, if any.
(v) Initial Interest Reset Date
and Interest Reset Dates.
(vi) Interest Payment Dates.
(vii) Index Maturity, if any.
(viii) Maximum and/or Minimum
Interest Rates, if any.
(ix) Calculation Agent (if other
than the Trustee).
7. Price to public of such Certificated
Note (or whether such Note is being
offered at varying prices relating to
prevailing market prices at time of
resale as determined by the Offering
Agent).
8. Trade Date.
9. Settlement Date (Original Issue Date).
10. Stated Maturity Date.
11. Redemption provisions, if any.
12. Repayment provisions, if any.
13. Default Rate, if any.
14. Net proceeds to the Company.
15. The Offering Agent's discount or
commission.
16. Whether such Note is being sold to the
Offering Agent as principal or to an
investor or other purchaser through the
Offering Agent acting as agent for the
Company.
17. Such other information specified with
respect to such Note (whether by
Addendum or otherwise).
23
<Page>
B. After receiving such settlement information
from the Offering Agent, the Company will
advise the Trustee of the above settlement
information by facsimile transmission
confirmed by telephone. The Company will
cause the Trustee to issue, authenticate and
deliver the Certificated Note.
C. The Trustee will complete the Certificated
Note in the form approved by the Company and
the Offering Agent, and will make three
copies thereof (herein called "Stub 1", "Stub
2" and "Stub 3"):
1. Certificated Note with the Offering
Agent's confirmation, if traded on a
principal basis, or the Offering Agent's
customer confirmation, if traded on an
agency basis.
2. Stub 1 for Trustee.
3. Stub 2 for Offering Agent.
4. Stub 3 for the Company.
D. With respect to each trade, the Trustee will
deliver the Certificated Note and Stub 2
thereof to the Offering Agent at the
following applicable address: Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Merrill
Lynch Money Markets Clearance, 55 Water
Street, 3rd Floor Plaza Level, DTC New York
Window, New York, New York 10041, Attention:
Morna Noel, (212) 855-2403, telecopier: (212)
855-2457; if to Banc One Capital Markets,
Inc., to: Banc One Capital Markets, Inc., One
Bank One Plaza, Suite IL 1-0595, 8th Floor,
Chicago, IL 60670, Attention Investment Grade
Securities; telecopier (312) 732-4773; if to
U.S. Bancorp Piper Jaffray Inc., to: U.S.
Bancorp Piper Jaffray Inc., U.S. Bancorp
Tower, 111 S.W. Fifth Avenue, Suite 1900,
Portland, Oregon 97204, Attention: Michael
Malmquist, telecopier (503) 275-3490, and the
Trustee will keep Stub 1. The Offering Agent
will acknowledge receipt of the Certificated
Note through a broker's receipt and will keep
Stub 2. Delivery of the Certificated Note
will be made only against such acknowledgment
of receipt. Upon determination that the
Certificated Note has been authorized,
delivered and completed as aforementioned,
the Offering Agent will wire the net proceeds
of the
24
<Page>
Certificated Note after deduction of its
applicable commission to the Company pursuant to
standard wire instructions given by the Company.
E. In the case of a Certificated Note sold
through the Offering Agent, as agent, the
Offering Agent will deliver such Certificated
Note (with the confirmation) to the purchaser
against payment in immediately available
funds.
F. The Trustee will send Stub 3 to the Company.
Settlement Procedures
Timetable: For offers to purchase Certificated Notes accepted
by the Company, Settlement Procedures A through F
set forth above shall be completed as soon as
possible following the trade but not later than
the respective times (New York City time) set
forth below:
<Table>
<Caption>
SETTLEMENT
PROCEDURE TIME
---------- ----
A 11:00 a.m. on the trade date or
within one hour following the trade
B 12:00 noon on the trade date or
within one hour following the trade
C-D 2:15 p.m. on Settlement Date
E 3:00 p.m. on Settlement Date
F 5:00 p.m. on Settlement Date
</Table>
Failure to Settle: In the case of Certificated Notes sold through the
Offering Agent, as agent, if an investor or other
purchaser of a Certificated Note from the Company
shall either fail to accept delivery of or make
payment for such Certificated Note on the date
fixed for settlement, the Offering Agent will
forthwith notify the Trustee and the Company by
telephone, confirmed in writing, and return such
Certificated Note to the Trustee.
The Trustee, upon receipt of such Certificated
Note from the Offering Agent, will immediately
advise the Company and the Company will promptly
arrange to credit the account of the Offering
Agent in an amount of immediately available funds
equal to the amount previously paid to the Company
by such Offering Agent in settlement for such
Certificated Note. Such credits will be made on
the Settlement Date if possible, and in any event
not later than the Business Day following the
Settlement Date; provided that the Company has
received notice on
25
<Page>
the same day. If such failure shall have occurred
for any reason other than failure by such Offering
Agent to perform its obligations hereunder or
under the Distribution Agreement, the Company will
reimburse such Offering Agent on an equitable
basis for its reasonable loss of the use of funds
during the period when the funds were credited to
the account of the Company. Immediately upon
receipt of the Certificated Note in respect of
which the failure occurred, the Trustee will
cancel and destroy such Certificated Note, make
appropriate entries in its records to reflect the
fact that such Certificated Note was never issued,
and accordingly notify in writing the Company.
26